Disability Insurance is coverage purchased to protect an employee from wages lost during a period where the employee is "disabled" (i.e. unable to work). While disabled, income will be paid to the employee weekly or monthly in the form of disability insurance. Individual policies commonly define disability insurance in one of two ways:
This distinction can be critically important. For example, if a surgeon loses a hand, she may not be able to perform surgery. If she has an "occupational-disability" policy, she would be able to recover, even though she can still work as a doctor in a non-surgical field. If she has a "general-disability" policy, there would be no recovery, even if the surgeon's only possible alternative is to be a tour guide.
Your insurance pay out may be stated as a percentage of your income or as a set dollar amount. Your specific policy defines how much you will be paid, how soon after you are disabled payments will appear in your mailbox, and when they will cease. Benefit periods may depend on whether the disability was caused by an accident or illness. Generally, the longer the benefit period, the higher your premiums (i.e. annual payments) will be. Injuries or sickness as a result of your employment may also be covered by worker's compensation.
Generally, there are three major types of individual long-term disability policies:
There many different kinds of disability benefit contracts. Some plans are available from your employer through its group health package and from private insurers. There are also various public sector programs including Social Security and some State Disability Insurance programs. Veterans, members of the armed forces, federal civil servants and coal miners are also covered by federally-sponsored programs.
Given the complexity of the legal issues involved and the tendency of insurance companies to vigorously defend claim denials, employees should retain an attorney experienced in insurance claims and bad faith litigation to evaluate potential legal claims. If you cannot afford an attorney, you may request that one takes your case on a contingency fee basis. Cases against disability insurers are frequently undertaken on a contingency fee basis where the attorney investigates and evaluates the case before filing a complaint, advances the costs of investigation and litigation, and is paid attorney fees only if there is a recovery.
Last Modified: 05-23-2018 08:44 PM PDTLaw Library Disclaimer
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