In the United States, if you are not working it usually means you are not making any money. This raises the question: "what happens if I cannot work?". Unfortunately, the answer is not the same for all. An injury can result in the inability to provide for yourself and/or your family. An injury can result in the loss of ability to work for an extended period of time. During this period, if you have not saved cash, you might be in for some troubles. Some individuals may lose their home and others may have to sell their belongings to get by. The sad truth is that if we cannot work, we cannot provide for ourselves. It comes to show that our greatest asset is our ability to maintain a job.
The best way to ensure that your income is protected during hard times is to purchase individual disability insurance (IDI). Individual disability insurance provides insurance protection to those who are working on commission or rely on bonuses to get by. Most times, full-time employees will receive disability benefits whenever they suffer an injury that puts them out of work. However, this is not the case with part-time workers and those who are working independently. The United States laws currently do not require employers to provide insurance coverage to those who are part-time workers or independently contracted. In other words, if you are not a full-time employee at a company and you suffer an injury, you may not be able to claim disability coverage.
Those who cannot claim disability insurance through their profession have the option to seek their own disability insurance. Additionally, those with high earning incomes may also be interested in disability insurance. The individual disability insurance can fill the wage gap. For instance, if you are a full-time employee the insurance disability provided through your social security will only cover up to a certain amount. If you are required to make mortgage or vehicle payments, you may find yourself counting pennies while learning to live on your new disability income. Individual disability insurance can help fill the gap between your disability income and your steady normal income. In turn, this means you can sit back, relax and recover while you are out on disability.
Individual disability insurance should be considered by any person with high earning potentials and payment obligations. According to the Center on Budget and Policy Priorities, a person that has just entered the workforce (around the age of 18) has one in three chances of dying or experiencing a disability before the age of retirement. If you are in the workforce and you work in a precautionary environment, you may want to consider individual disability insurance.
Many in the workforce have some type of insurance that is either provided through private organizations or through their social security. Many individuals are denied social security disability benefits and there is nothing they may do to claim disability coverage. This is due to the bureaucratic system which places strict requirements for disability eligibility.
On the other hand, if you are insured through a private organization, an attorney can help you claim benefits whenever you are denied coverage. Workers who have obtained disability insurance on their own should understand that insurance contracts can be upheld in a courtroom. When an insurance company fails to uphold the provisions of an insurance contract, the insurance company may be taken to court. Unlike the insurance provided by the state, individual insurance coverage can be claimed through a courtroom proceeding whenever an insurance company acts in bad faith.
To contact an attorney about individual disability insurance coverage, you may reach the Stop Health Insurance Denial at 310-695-5241. When an insurance company denies your claims, it is best to document every step of the denial process. You will want to keep notes on your emails, letters, and other information pertaining to your case. With documented information, your attorney will be able to fight for your case in a courtroom.
The following section will discuss in further depth the difference between social security benefits and individual insurance. Additionally, it will highlight the obligations of an insurance company under the law. Keep in mind that the following is a broad interpretation of the insurance laws. To learn specifically how the law applies to the factors of your case, you will want to speak with an insurance law professional.
Policy Holder Rights
An insurance company has the obligation to act in good faith. Good faith means a variety of things under the law. For instance, an insurance company is required to treat every policyholder with respect, they are required to reply to claims in a timely manner, and they are required to uphold the promises in the insurance contract. When an insurance company denies coverage that is rightfully yours while acting in bad faith, it is time to seek legal consultation. When a claim is denied, it means the cost of treatment will need to come from your pocket. In cases involving disability insurance, it means you will not get the financial coverage you were promised. This can mean you will not have enough income to keep up with essential payments like mortgage payments, vehicle payments, or other essential property payments. Furthermore, it also means you may not be able to keep up with essential food and cloth shopping. When insurance disability coverage is denied, it is crucial to seek legal assistance to claim the coverage that you deserve.
As a policyholder, there are a number of practices that are illegal under the insurance laws of the United States. As mentioned earlier, when an insurance company acts in bad faith, the policyholder has the ability to bring the case into a courtroom. Some bad faith practices include the following:
-Under the law, insurance companies are required to respond to coverage claims in a timely manner. In the United States, an insurance company is required to reply to a coverage claim within 15 days. If longer, the action can be seen as bad faith. If an insurance company is taking more time than is warranted to respond to your claim, it is essential that you contact a legal professional. After a certain period, the policyholder may not be able to take legal action. This is known as the 'statue of limitations'. Once you pass the statute of limitations the insurance company is not required to provide coverage and may not be held responsible in a courtroom.
-Prolonging your case. As mentioned above, insurance companies are required to respond to your case in a timely manner. However, when a company is acting in bad faith, there are a number of ways in which they can prolong your case to pass the statutes of limitations. Some of these practices include requesting documents that have already been provided or documents that are not essential to your case. An insurance company may request documents that are difficult to obtain with the hopes surpassing the statutes of limitations. Furthermore, an insurance company may attempt to prolong your case by opening up a new case. An insurance company may claim that your documents have been lost or misplaced and therefore a new case needs to be open. If this is the case, they should process your case as soon as possible.
-No legitimate reasons for coverage claim denial. When insurance claims are denied, an insurance company is required to provide a clear explanation as to why your claim is being denied. When denying a claim, the insurance company is required to fully investigate your case (in good faith) and provide reasons as to why the coverage is being denied. Without an investigation, your insurance company may not have legitimate reasons for denying your case.
Resorting to threats. An insurance company is required to treat the policyholder with respect. As an agreement exists between both parties, both parties are required to work with each other to reach an agreement and conclusion. It is a bad faith practice when an insurance company attempts to threaten or scare a policyholder from filing or proceeding with a policy claim. If your insurance provider is resorting to threats or using other scare tactics to halt your case, it is time to contact a legal professional.
As mentioned above, there are a number of rights that exist for policy holders under the law. Whenever an insurance claim is denied, it is time to reach out to a legal professional to learn if there is anything you can do. An insurance law attorney will be able to shine a light on bad faith practices and will litigate your case in a courtroom to ensure you receive the coverage that is yours.
Social Security Disability Insurance vs Individual Disability Insurance
Despite the trickery that some insurance companies resort to with efforts to save cash, there are a number of trusted disability insurance companies that keep their word. Disability insurance can be a lifesaver for those working on their own accounts and with financial obligations brought upon by their families. Disability insurance should not be confused with the disability insurance provided through your social security. Many disregard ‘individual disability insurance’, because they think they are covered by the social security coverage they receive through their employer. While disability insurance provides a certain amount of coverage, there are multiple factors that differentiate social security disability coverage and individual disability coverage. The following section will highlight some of the key difference that exists between both.
What is Social Security Disability?
Social security disability is provided to full-time employees that experience a disability and are no longer able to work. The amount of disability income a person receives is determined by their income and the length is determined by how long it takes them to get back on their feet. Social security disability is something you should definitely look into if you are disabled while working. Social security disability insurance (SSDI) will not cover your whole income but it will cover a good portion of your income which will help you get by.
One issue with social security disability insurance is that not everyone will qualify for coverage. The Social Security Administration has strict requirements for those who wish to claim coverage. Only a small portion of those who apply, less than forty percent will receive coverage through the SSA. When you claim is denied by the SSA, the process to reapply for coverage is a lengthy one which may take up to a year.
Social Security Disability Eligibility
As mentioned above, there is a limited number of individuals that receive disability coverage the first time they apply. This is due to the eligibility requirements set forth by the Social Security Administration. To be eligible for SSDI, you must meet some of the following requirements:
-One of the main reasons younger employees are denied SSDI is that they have not worked long enough to receive disability coverage. According to the Center on Budget and Policy Priorities (CBPP), an individual must have worked at least a fourth of their lifetime. This means that if you are 20 years old, you must have worked for at least five years. Furthermore, you must have worked five of the last ten years.
-The individual must have suffered a grave physical or mental impairment that may last up to a year. The SSA will consider clinical findings to determine whether your injury is grave enough.
-You must not be able to engage with a ‘substantial gainful activity' (SGA). A substantial gainful activity is a job that provides economic gains. The Social Security administration defines 'gainful' a job where a worker makes more than $1220 a month. For blind people, the SGA amount is at $2040.
The Social Security Administration provides coverage to about four in every ten individuals that apply for coverage. With these strict requirements, it is clear that not all who apply will receive coverage from the SSDI.
Individual Disability Insurance vs Social Security Disability Insurance
Many who are employed may not know the exact requirements to receive SSDI which is why they fail to consider other options for disability insurance. It is necessary to understand that social security disability insurance is not approved as frequently as one may think. On top of the strict requirements for eligibility, SSDI will not cover disabled employees’ full income. This means that even if you qualify, you will have to find another way to fill the gap in your income. If you have a family and payment obligations, SSDI will not provide the peace of mind you require while you recover from your injury. For these reasons, it is often a good idea to look into alternative disability coverage.
Types of Disability Insurance
In the market place, you can find a variety of disability insurance policies that can cover many aspects of your life in the event that you are too ill to work. The following are some of the most common disability insurances you can find today:
- Long-term disability insurance
- Short-term disability insurance
- Mortgage disability insurance
Long Term Disability Insurance
Long-term disability insurance can be purchased if you are employed by a company or if you are self-employed. The benefits period for those under an LTDI plan can last anywhere between two years, ten years, or until you retire. This type of insurance costs between one to three percent of your annual income.
Within LTDI there are two types of insurance policies that you should be aware of. There is 'any occupation disability insurance' and 'own occupation disability insurance'. Any occupation disability insurance will usually provide benefits if there is no occupation that you can perform while you are sick. Individuals under this policy will receive benefits while they transition from work sector. On the other hand, own disability insurance is an insurance policy that will cover your disability if you are unable to work in your own profession. This type of insurance is usually costlier than the prior.
Within own occupation disability insurance, there are three types of insurance policies.
1. True Own Occupation: the disabled employee will receive benefits if they cannot work at their job. The employee will receive benefits even if they start working somewhere else.
2. Own Occupation (not working): the disabled employee will receive benefits until he or she begins working at a new place. Once the individual is employed elsewhere, the benefits will discontinue.
3. Transitional Own Occupation: disabled individuals that find another job (one that pays less than the prior) will receive benefits to cover the difference in income. In other words, if you are earning $4000 at company A and due to your injury, you start working at company B where your income is $3000, the transitional own occupation disability insurance will cover the difference ($1000).
Short Term Disability Insurance
Unlike long term disability insurance which can provide financial coverage until your retirement, short term disability is meant to cover a shorter period of time (usually around one year). However, short term disability insurance can cover more of your income, up to 80%. Additionally, short term disability income kicks in within a few weeks which means you get coverage while you wait for your long-term disability insurance.
Mortgage Disability Insurance
Mortgage disability insurance (also known as mortgage payment protection insurance) covers mortgage payments in the event that you are too ill to work. This type of insurance can be purchased from an insurance company, a broker, or your mortgage lender. This type of insurance is ideal if you are making mortgage payments.
Find an Health Insurance Attorney Near You
Those living in the United States should know that there are laws that guide insurance companies. The relationship that exists between the policyholder and insurance company is one that is governed by the laws of your state. If you are living in the United States and you would like to consult with a professional about your insurance policy, you may contact the Stop Health Insurance Denial at 310-695-5241.