Long Term Disability Frequently Asked Questions

Long term disability insurance hamilton

What is Insurance for Long-Term Disability?

Long-term disability insurance is a type of coverage that pays a percentage of your typical income if you are unable to return to work due to a disabling injury or disease. For partial disability coverage, certain policies may also pay you a percentage of your income if you are unable to work more than part-time due to your disability. The elimination period for long-term disability benefits ranges from three to twelve months, depending on the coverage level that you pick or that your employer provides as part of your benefits package.

How Does Long-Term Disability Insurance Functioning?

When you have a qualifying condition and your application for benefits is approved, long-term disability insurance will pay you the predetermined percentage of your former income as monthly benefits. The benefits are tax-exempt. If your policy pays between 60 and 70 percent of your income, you should receive around the same amount as while you were employed. Your first check will arrive after the elimination period, which is a period of time following the onset of your disability during which you will not receive benefits. If you have short-term disability coverage, many long-term disability policies contain elimination periods that begin when your short-term coverage finishes and last for the same length of time. The coverage lasts during the policy’s term, which can be as little as two years or as long as age 65, depending on the choice selected when the insurance was acquired. It is imperative that you pay your premiums, as you may not obtain benefits if you do not.

What is the duration of long-term disability insurance?

There are a variety of potential terms for long term disability coverage, and the policies with longer durations are more expensive. The cheapest policies have durations as little as two years, but it would be prudent to select them. It is advisable to buy a coverage that will pay you for at least five years, as the majority of disabilities are long-lasting. If you are able to do so, the ideal alternative is to purchase coverage that pays benefits until age 65, because if you become disabled and are unable to work, you can continue to receive benefits until you reach retirement age.

What is covered under long-term disability insurance?

If you choose the own-occupation coverage option instead of the any-occupation coverage option, your long-term disability insurance may cover periods during which you are unable to return to your prior occupation. This implies you will continue to get benefits even if you are able to return to work in a different occupation than before. If you have the option for partial disability, your long-term disability insurance coverage may also pay benefits if you are able to return to work part-time due to your disability. You will receive a percentage of your previous monthly income prior to the onset of your disability. There are several coverage options available for selection. For instance, a cost-of-living adjustment is an additional benefit that offers an annual inflation-based rise. A viable alternative is an unemployment waiver, which exempts you from paying premiums during months of unemployment until you find a new job.

What amount is paid by long-term disability insurance?

The amount of your long-term disability benefits will depend on your previous pay and the percentage you chose when you got your policy. Some insurance may pay up to 70 percent of your past income, although most pay between 50 and 60 percent. If you pay your own premiums with after-tax cash, your benefits will not be subject to taxation. If your employer pays your premiums with pre-tax cash, your benefits will be subject to taxation on your tax returns.

What is the cost of long-term disability insurance?

The cost of your long-term disability insurance depends on the coverage options you select, the duration of the elimination period, whether you acquire your policy at group or individual rates, and your age at the time of your initial purchase. The premiums for younger buyers are less expensive than those for older buyers. The average yearly premium for long-term disability coverage at group rates is $226. The premium payments are increased proportionally to the number of coverage options selected. Individuals who are in the market for an insurance should browse around due to the possibility of pricing differences across insurers.

What is a Functional Capability Assessment?

When you submit your claim for benefits and medical documentation of your impairment, your insurance company will likely request that you complete a functional capacity examination, or FCE. The FCE is a battery of assessments designed to measure the impact of your handicap on your ability to perform your job duties. It is also meant to detect false claims of illness. Frequently, insurance companies use FCEs to deny claims.

What If My Claim for Long-Term Disability Is Denied?

If your claim for long-term disability benefits is denied, you will certainly want the assistance of an expert long-term disability insurance attorney, such as one from Hamilton DIsability Lawyers. We may request that you have a medical examination from your treating physician and acquire the necessary medical records to substantiate your claim. If we are unable to negotiate a settlement on your behalf, we may initiate a lawsuit against the firm to assist you receive the benefits you are entitled to.