Six Factors to Consider Before Purchasing Individual Long-Term Disability Coverage
Long-term disability benefits provide you with important protection in the event you are unable to work, ensuring you have the money to meet your living costs and other expenses. While you may be entitled to Social Security Disability Insurance (SSDI), this is generally not enough to provide financial security. If benefits are not provided through employer-sponsored long-term disability insurance plans, it is a smart idea to add an individual policy. However, these policies have greater leeway and less oversight in terms of what they provide. The following are six important factors to consider before making your purchase.
- The Insurer
There are plenty of providers offering individual long-term disability coverage. Unfortunately, not all of them are legitimate or a worthwhile investment. While insurers and benefit administrators of employer-provided long-term disability insurance programs are subject to strict rules and regulations under the Employee Retirement Income Security Act of 1974 (ERISA), these same protections are not in place with individual policies. Research the company beforehand prior to making your purchase.
- Their Definition of a Long-Term Disability
Once you do find a reputable company to purchase individual long-term disability coverage from, be sure you are clear on how they define a long-term disability. Some policies have long lists of excluded conditions or require that you be unable to work for extended periods before coverage kicks in.
- Whether Payments Are Waived If You File A Claim
This is a common area consumers often overlook. According to Insure, it is also a common rider you can easily add to your policy. If you are unable to work due to a long-term disability, it makes sense to purchase a policy that waives your payments during this period.
- The Benefit Coverage Period
In addition to reviewing the various types of covered conditions, be aware of what the coverage period is. Some companies only provide benefits for several years. Ideally, you are looking for a policy that allows you to collect for as long as you suffer a disability.
- Residual Benefits
Residual benefits help to make up for losses in income in the event you are only able to work part-time. This is one common area that is often included among policy restrictions. Carefully review all document policies to make sure you are adequately covered.
- Dispute Resolution Policies
With employer-provided policies, ERISA governs dispute resolution policies, dictating how these should be handled and the appeals process. You do not have these protections with individual long-term disability insurance. Make sure you are clear on the company’s dispute resolution guidelines as well as your rights to file an appeal in the event of denied or disputed benefits.
Let Us Help You Today
To ensure you are making the right decisions when it comes to purchasing a long-term disability policy or when delays, denied claims or disputes arise, reach out to Farrell Disability Law. To request a consultation in our office, contact our Orlando long-term disability attorney today.