Long-term disability (LTD) insurance provides financial benefits to individuals who are unable to work due to a disability. It serves as a crucial safety net, offering income replacement for an extended period. There are, however, certain circumstances under which the payments can be canceled.
Understanding the Basics of Long-term Disability
In the United States, private employer-sponsored disability insurance plans are regulated by the Employee Retirement Income Security Act (ERISA), which sets standards for plan administration and regulation. It outlines the process for filing claims and appealing denials.
Reasons for Cancellation
There are instances where policyholders take actions that lead to the termination of their long-term disability payments. These scenarios can include:
- Discovery of Activities by Surveillance: Insurance companies may conduct surveillance on policyholders to assess if their reported disability aligns with their observed activities. If policyholders are seen engaging in activities inconsistent with their claimed impairments, the insurance company may conclude that their condition has improved and cancel their long-term disability benefits.
- Working While Receiving Benefits: If policyholders work while receiving long-term disability benefits, the insurance company may halt their payments, depending on the policy. However, if policyholders earn only a small portion of their pre-disability income, they may still be eligible for partial benefits. It’s important to review the policy to understand the impact of working on continued eligibility and benefit amounts.
- Time Limitation on Mental and Chronic Conditions: Many long-term disability insurance policies impose a 24-month limitation on disabilities arising from mental, nervous, and psychological impairments, as well as certain chronic conditions. After this period, benefits for these conditions may be terminated, even if the disability persists. There are exceptions to this limitation for specific diagnoses or conditions.
- Failure to Follow Policy Terms: Insurance companies may terminate benefits if policyholders fail to comply with the terms of their policy. This includes not applying for Social Security Disability benefits as required, not continuing treatment, missing doctor’s appointments, or failing to provide adequate proof of ongoing disability.
- Shifting Definition of Disability: Some long-term disability policies alter the definition of disability after a certain period, often 24 months. Initially, disability may be defined as the inability to perform one’s own occupation, but after 24 months, it may narrow to the inability to perform any occupation. If policyholders are deemed medically capable of performing any job in the economy, their long-term disability benefits could be terminated, regardless of job availability.
- Aging Out of Coverage: Long-term disability benefits may cease when policyholders reach the full retirement age for Social Security or upon their death. The specific terms and duration of coverage should be carefully reviewed in the policy.
Exceptions to the Rules
It’s crucial to note that exceptions to these cancellation rules may exist in certain cases. For example, specific diagnoses or conditions might extend the coverage period beyond the typical limitations. Consulting with an attorney experienced in long-term disability claims can provide individuals with guidance in the protection of their rights and explore legal options if their benefits are unfairly denied or terminated.
Contact an Experienced Long Term Disability Lawyer
Securing the services of a seasoned long-term disability attorney can be invaluable if your benefits have been unjustly canceled. We possess a deep understanding of the complexities involved in disability law and can adeptly navigate the appeals process. We will scrutinize your insurance policy, medical records, and the rationale for the cancellation, identifying any discrepancies or errors.
Besides offering legal advice, we can also help in gathering compelling evidence, preparing comprehensive appeals, and advocating fiercely on your behalf. If your appeal reaches litigation, we can represent you in court, fighting to secure the benefits you rightly deserve. Empowering yourself with legal counsel can increase your chances of a successful resolution and alleviate the stress associated with confronting insurance companies solo. Contact us today to get the help you need.