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How insurers try to shrink long-term disability benefits

There is no mystery about why insurers try to shrink long-term disability (LTD) benefits. They do it because the more they pay out on claims to injured or ill workers, the smaller their profits become.

There is more than one way in which they try to shrink LTD benefits, however. The most obvious and common is to try to find reasons to deny claims. Another is to limit those claims in duration and to do what they can to reduce the amount paid to the policyholder. All of the tactics can be effective, especially in cases in which the policyholder takes the insurer at their word and does not fight for the long-term disability benefits they need and deserve.

A recent article on short- and long-term disability insurance points out that these are valuable benefits many Raleigh employers offer to employees. But the attorney who wrote the article points out that in some cases, the benefits are not as valuable as they appear to be at first glance.

For one thing, insurers typically include clauses buried deep in their policies that make it difficult for people with sedentary occupations (virtually everyone who works in an office, for instance) to claim that they’re disabled. The claimant would need either “severe physical impairments” or evidence of “mental or psychological impairments” preventing them from doing their job.

The buried clause that makes it an uphill struggle to get LTD benefits for psychological impairment is one that restricts benefits to 24 months or less.

Insurance companies have another trick up their sleeves, often requiring policyholders to file for Social Security Disability as well. If SSD is approved, your insurance benefit is reduced by the amount you receive in SSD benefits. So if your LTD benefit is $3,000 per month and you get $1,500 per month from SSD, your insurer only pays you $1,500 per month – a 50 percent savings.

It is important to discuss LTD and SSD options with a Raleigh attorney who understands insurer attempts to deny benefits that you have paid for and deserve.



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