Understanding Disability Insurance

Your ability to earn an income is often your most valuable asset. What would happen if an unexpected illness or injury prevented you from working? Disability insurance is designed to protect you when the unexpected occurs, providing crucial income replacement if you become disabled and unable to work.

At Dorian Law, we understand the importance of disability insurance and are dedicated to helping individuals secure the disability benefits they are rightfully entitled to. Whether you are exploring disability insurance options or facing challenges with a disability claim, this overview will provide you with an understanding of disability insurance and how Dorian Law might be able to help.

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At Dorian Law, we focus our disability insurance practice on representing individuals in claims and disputes related to:

  • Group Disability Insurance (ERISA and Non-ERISA)

  • Individual Disability Insurance (State Law Governed)

We have a Proven Track Record of success in helping clients secure the disability benefits they are entitled to under both group and individual policies. Our Deep Industry Knowledge of disability insurance law, policy interpretation, ERISA regulations, and state insurance laws allows us to effectively advocate for our clients at every stage of the claim process – from initial application to appeals and litigation. And our Client-Focused Approach ensures you receive compassionate, personalized support and guidance throughout your disability claim journey.

Below are sections covering:

  • What is Disability Insurance and Why is it Important?

  • Types of Disability Insurance

  • Choosing the Right Disability Insurance and Understanding Your Coverage

  • Frequently Asked Questions (FAQ) About Disability Insurance

What is Disability Insurance and Why is it Important?

Disability insurance is a contract between you and an insurance company. In exchange for regular premium payments, the insurer promises to pay you a portion of your income if you become disabled and are unable to work due to illness or injury. This income replacement helps you maintain your financial stability, cover living expenses, and support your family when you can no longer earn a paycheck.

Disability insurance is vital because:

  • Disability is more common than you might think: A significant portion of the workforce will experience a disability that keeps them out of work for an extended period at some point in their careers.

  • It replaces lost income: Disability benefits provide a financial safety net to cover essential expenses like mortgage/rent, utilities, food, healthcare, and other living costs when your income stops due to disability.

  • It protects your financial future: Disability can derail your financial plans and savings. Disability insurance helps maintain your financial stability and protect your long-term financial goals.

  • It provides peace of mind: Knowing you have disability insurance coverage provides peace of mind and financial security, knowing you are protected if the unexpected happens.

Types of Disability Insurance

Disability insurance comes in various forms, designed to meet different needs and circumstances. While Dorian Law focuses on Group and Individual Disability Insurance, understanding the broader landscape is helpful. Here's an overview of common types:

Types of Disability Insurance Dorian Law Does Handle:

  • Group Disability Insurance: Typically offered by employers as a benefit to their employees. Group disability policies can be:

    • Short-Term Disability (STD): Provides benefits for a short period (e.g., weeks or months), usually covering the initial weeks or months after a disability begins. STD often replaces a higher percentage of your income than long-term disability.

    • Long-Term Disability (LTD): Provides benefits for a longer duration, potentially years or even until retirement age, if you remain disabled. LTD benefits usually replace a lower percentage of your income than STD, but for a much longer period.

    • ERISA-Governed Group Disability: Most employer-sponsored group disability policies are governed by ERISA (Employee Retirement Income Security Act), a federal law that sets specific rules for claims, appeals, and lawsuits. Dorian Law has extensive experience in ERISA disability claims and litigation.

    • Non-ERISA Group Disability (Less Common): In some rarer cases, group disability policies (e.g., for church employees or government entities in certain circumstances) may not be governed by ERISA and are instead subject to state law.

  • Individual Disability Insurance: Purchased directly by individuals from an insurance company, independent of employment. Individual disability policies offer greater customization and portability:

    • Individual Short-Term Disability (Rare): Less common as individual policies tend to focus on longer-term protection.

    • Individual Long-Term Disability: The primary type of individual disability insurance. Offers long-term income replacement tailored to individual needs.

    • "Own Occupation" vs. "Any Occupation" Policies: Individual policies can define "disability" in different ways. "Own occupation" policies pay benefits if you can't perform the duties of your specific occupation. "Any occupation" policies are stricter, paying benefits only if you can't perform any reasonable occupation. "Own occupation" policies generally offer broader protection, and Dorian Law can advise you on policy definitions.

    • State Law Governed: Individual disability insurance policies are governed by state insurance laws, offering different legal frameworks for claims and disputes compared to ERISA.

Types of Disability Insurance Dorian Law Does Not Handle:

  • Workers' Compensation Insurance (Worker's Comp): This is a state-mandated insurance system provided by employers to cover employees who are injured or become ill on the job. Worker's Comp covers medical expenses and lost wages specifically related to work-related injuries or illnesses. Dorian Law does not handle Worker's Compensation claims.

  • State Disability Insurance (SDI) / Unemployment Compensation Disability (UCD): Offered by some states (like California, New York, New Jersey, Rhode Island, Hawaii, and Puerto Rico), these are short-term disability programs that provide temporary benefits to eligible workers who are unable to work due to non-work-related illness or injury. Benefits are typically a percentage of your wages for a limited duration (e.g., weeks or months). Dorian Law does not handle State Disability Insurance claims.

  • Social Security Disability Insurance (SSDI): A federal program administered by the Social Security Administration (SSA). SSDI provides benefits to individuals who have a severe, long-term disability that prevents them from performing any substantial gainful activity. SSDI has strict eligibility requirements and a lengthy application process. Dorian Law does not handle Social Security Disability Insurance claims.

  • Veteran's Affairs (VA) Disability Benefits: While we deeply respect and support our veterans, Dorian Law does not handle claims for Veteran's Affairs (VA) disability benefits. This is a specialized system with its own rules, regulations, and appeals processes that fall outside of our firm's expertise in ERISA and private disability insurance. If you are a veteran seeking assistance with VA disability benefits, we recommend contacting organizations that specialize in veterans' law and can provide you with the dedicated support you need.

Choosing the Right Disability Insurance and Understanding Your Coverage

Whether you are considering purchasing disability insurance or already have a policy, it's essential to:

  • Understand the type of policy you have (Group or Individual).

  • Know if your Group policy is ERISA-governed.

  • Carefully review your policy's definition of "disability," benefit amounts, elimination periods, benefit durations, exclusions, and limitations.

  • Determine whether your disability benefit will be taxed or not.

  • Consider consulting with an insurance professional or financial advisor to determine the right type and amount of disability coverage for your individual needs.

Frequently Asked Questions (FAQ) About Disability Insurance

  • A: Short-term disability (STD) provides benefits for a limited time, typically a few weeks or months, often covering the initial period after a disability. Long-term disability (LTD) provides benefits for a longer duration, potentially years or even until retirement, if you remain disabled long-term. STD usually replaces a higher percentage of income for a shorter period, while LTD replaces a lower percentage for a longer period.

  • A: Generally, yes. Most group disability insurance policies offered by private employers are governed by ERISA (Employee Retirement Income Security Act), a federal law. There are some exceptions (e.g., for government or church employers in certain situations), but ERISA is the likely governing law for most employer-provided group disability plans.

  • A: The definition of "disability" is crucial and varies by policy. "Own occupation" policies are more generous, paying benefits if you can't perform the duties of your specific job, but not always how you performed it for your employer. "Any occupation" policies are stricter, requiring you to be unable to perform any occupation to qualify. However, the specific definition may not be as strict (i.e. it has an income qualifier) or even stricter (i.e. part-time work is sufficient). Policy definitions can also change over time (e.g., "own occupation" for a limited period, then "any occupation"). Understanding your policy's definition of disability is paramount. If you need help interpreting this critical policy language, reach out to us.

  • A: The amount of disability insurance coverage you need depends on your income, expenses, financial obligations, and taxation. A common guideline is to aim for disability benefits that replace around 50-70% of your pre-disability income. At these levels, if the benefit is untaxed, you may realize only a small difference in your post-tax income. If the benefit is taxed, you may experience a much larger drop in “real” income. Long term disability insurance taxation depends on how the premiums were paid.

  • A: Disability policies often contain exclusions and limitations, such as:

    • Pre-existing condition exclusions: May exclude coverage for disabilities related to pre-existing medical conditions, especially in the initial policy period.

    • Mental/nervous condition limitations: Some policies limit benefits for disabilities primarily due to mental health conditions or substance abuse to around 12-24 months.

    • Self-reported symptom limitations: Policies may have limitations on claims based primarily on subjective, self-reported symptoms without objective medical findings. This is often applied to disabilities from Chronic Fatigue Syndrome (CFS) / Myalgic Encephalomyelitis (ME), Fibromyalgia, or Long-COVID.

    • Mental and Nervous Condition Limitations: Many disability policies limit benefits for mental or nervous conditions to around 12-24 months.

    • Musculoskeletal Condition Limitations: Some disability policies also contain limitations on benefits for musculoskeletal conditions like back pain or arthritis, potentially affecting the duration or requirements for your claim.

    • Exclusions for specific activities or conditions: Policies might exclude disabilities arising from war, intentionally self-inflicted injuries, or certain high-risk activities.

  • A: It's possible to have both group and individual disability insurance. Individual policies can supplement group coverage, potentially providing higher overall income replacement and more tailored protection. However, policies often have coordination of benefits clauses, which may reduce benefits if you receive income from multiple sources.

If you have questions about your disability insurance coverage, are considering filing a disability claim, or are facing challenges with a disability claim denial, Dorian Law is here to help. Contact us for a free consultation. Let us put The Dorian Law Advantage to work for you.