Most long-term disability (LTD) benefits do not fully replace the wages that you were receiving at the time that your illness or injury made you unable to work. Rather, you usually receive a percentage of your pre-disability wage. In many cases, LTD benefits amount to about 60% of your wages, although this percentage may vary from one policy to the next.
However, you should understand that most long-term disability policies reserve the right of the insurance company to reduce your LTD benefits by the amount of any “other income.” This income may include Social Security disability benefits, Social Security benefits that your children receive due to your disability, and even worker’s compensation benefits. Even worse, if you are awarded back benefits from Social Security or worker’s compensation, the insurance company may file suit against you for “overpaying” your LTD benefits due to the “other income” that you now have received.
As a result, you may end up receiving far less in LTD benefits than the percentage of your pre-disability wages to which you thought you were entitled. Since it commonly takes about two years to obtain Social Security disability benefits, it is not uncommon to receive a large back-pay award. Most LTD policies require that you apply for Social Security disability benefits as a condition of receiving LTD benefits. Then, the insurance company requires that you sign a repayment agreement, which means you have to pay back the LTD benefits that you wouldn’t have been eligible to receive had you been receiving Social Security disability benefits at the same time. This can mean that most or all of your Social Security disability benefits backpay award must go to the insurance company to “reimburse” it for “overpaid” LTD benefits.
It can benefit you greatly to get legal advice about all the potential means of building and maintaining the most effective ERISA long-term disability claim possible and guidance as to the pitfalls to avoid. Bonnici Law Group provides skilled, aggressive legal representation on a regular basis for individuals who are seeking long-term disability benefits under insurance policies governed by ERISA. Our priority is to represent your interests and protect your rights to the benefits that you deserve. Call us at 619-259-5199 and schedule an appointment to meet with us about your case today.