Most people with long term disability (“LTD”) insurance obtain that coverage through their employer. Thus, most of us are stuck with whatever insurance company and policy our employer chooses to purchase. And while you might think to yourself, “they’re all the same, so who cares which insurance company my employer decides to go with,” nothing could be further from the truth.
LTD insurance policies vary widely depending on which insurance company is issuing the policy. Some companies offer good, comprehensive coverage that treats every type of disability more or less the same. Under these policies, regardless of whether your disability is due to physical or psychiatric reasons, you will be paid LTD benefits as long as you remain disabled under the terms of the policy.
Most LTD policies, however, will differentiate between physical disabilities and psychiatric disabilities. If your disability is “due to” a mental and nervous condition, or worse yet simply “caused or contributed to by” a mental and nervous condition, most insurers will only pay you LTD benefits for a maximum of 2 years (versus paying until age 65 for a physical disability). This distinction provides LTD insurance companies with one of their favorite tactics: They will cut off benefits for people under the 2 year limitation by arguing that while you might have some physical problems, the real reason you can’t work is because you’re suffering from depression/stress/anxiety.
But there’s another group of LTD insurers and policies that are even more restrictive. Some policies go a step further beyond the physical/mental distinction, and actually differentiate between various types of physical disabilities. Depending on what physical problem is keeping you from work, you may only be entitled to 2 years of benefits instead of getting paid until age 65. And just like the physical/mental issue discussed above, insurance companies will use this to say that your main disability is the one limited to 2 years under the policy and not the one that would be payable until age 65.
Here are a few examples we’ve encountered from various client’s policies, all limited to 2 years:
- Disabilities due to Chronic Fatigue (i.e. Chronic Fatigue Syndrome, CFIDS, Epstein-Barr virus)
- Disabilities due to Chemical and Environmental Illness (i.e. Toxic Encephalopathy)
- Disabilities due to Musculoskeletal and Connective Tissue Disorders (i.e. Fibromyalgia, back/neck injuries, Carpal Tunnel syndrome, TMJ)
So the question becomes: “Why would my employer choose a policy/insurance company that differentiates between certain types of physical disabilities?” The answer (as always) is MONEY! The more restrictions and limitations in an LTD policy, the cheaper the premiums are for your employer.
Obviously most people don’t even bother to look at their LTD coverage until they have a problem. Then they get blindsided when they find out they are only entitled to benefits for a short period of time even though they won’t be able to return to work when that time period expires. The best thing you can do to combat this is to find out what your policy covers and limits before you have a problem. That way when you submit your claim and medical records, you can be careful to make sure the LTD insurer knows exactly what problem is keeping you from being able to work, instead of them telling you which problem it is and limiting your benefits accordingly.
Or better yet, if you find out that your LTD policy is one of these more restrictive types, complain to your employer! Tell them that the disability coverage they obtained is sub-par, and that even though it might be a little bit cheaper the negatives far outweigh the positives. Odds are your employer might not even realize they were sold a sub-standard LTD policy, and if they truly care about their employees will find a better policy/insurance company.
The key to a successful insurance claim, LTD or otherwise, if to be as informed as possible before you have a problem. Kantor & Kantor is always ready, willing, and able to help you figure out your policy if you have questions. And, of course, if your LTD claim gets denied call us right away at (818) 886-2525 or via our online contact form for a FREE consultation where we will review your case at no charge, and we only get paid if we win your case.