Why Long-Term Disability Insurance is Important- 1-800-JUSTICE®

This video explains the importance of long-term disability insurance and how it functions. Long-term disability insurance provides financial support if you become unable to work due to a disability, typically covering 66% to 70% of your pre-accident income after a waiting period. The first two years of coverage focus on your ability to perform your own occupation, but after that, the criteria shift to whether you can do any job for which you are reasonably suited. Many claims are denied at this stage, leading to the need for legal assistance. Jeffrey Preszler from Preszler Injury Lawyers discusses how litigation can help secure the benefits you deserve, emphasizing that these policies can last until age 65, contrary to common misconceptions. If you've faced a denial, you can contact Jeffrey Preszler at 1-800-JUSTICE for support.

I'm often asked what long-term disability insurance is and why it's important. First of all, it is a type of insurance that is either purchased privately or provided through your employer. The purpose of the insurance is to provide you with a certain level of coverage in the event that you become disabled and unable to work. The level of coverage available is always defined in the policy and varies for each employer and individual. Generally, we see a replacement wage of approximately 66% to 70% of your pre-accident gross income, although the policies can apply to net income or gross income. Each policy is different, and frankly, each carrier provides different types of coverage.

Now, why is long-term disability insurance important? In the event that you ever become disabled, you will have some sort of safety net over and above what you receive from employment insurance or Canada Pension Plan disability. Most people can recognize that if you are injured or become disabled for any reason, you need some level of income to sustain yourself and your family. This is where long-term disability policies come into play.

When speaking about long-term disability, there are really two different components to a long-term disability insurance plan. The first component provides you with coverage for the first two years following the onset of disability. Generally, there is an elimination period in most policies. Most people know what short-term disability is; it is provided before the long-term disability benefits kick in. This elimination period is typically similar to the short-term disability timeline, which is generally 90 days, 120 days, or even up to 180 days. During that period, you do not receive any long-term disability benefits. Long-term disability kicks in after that elimination period or when the short-term disability plan expires.

Short-term disability generally provides you with a higher level of coverage, whether it's 80%, 90%, or even 100% of replacement wage for that period, whether it’s again 120 days, 150 days, or 180 days. After the elimination period in short-term disability benefits coverage ends, then the long-term disability kicks in. For the first two years of a long-term disability policy, you are entitled to coverage provided you are unable to do your own occupation.

What does that mean? You may hear about an "own occupation" test. It literally means that if you are unable to do your own job, then you qualify, provided you have a medical reason and there are no exclusions, such as pre-existing conditions or other exclusions set out under your policy. If you are unable to do your own job, you are entitled to your long-term disability benefits. However, we often see the most issues arise once the two-year period ends or as that anniversary approaches. That's when we frequently see insurance companies starting to ask questions about whether or not you will qualify for the next component of the test.

The post-104 week or post-two-year test describes whether you are able to do any job that you are reasonably suited for. This is where we see the bulk of litigation. Insurance companies feel that after two years, you are capable of doing some sort of job for which you are reasonably suited, and that is where most denials come. Even though you may have been a construction worker before your disability and you qualified for the first two years, the insurance company may then say, "Well, hold on a second. You are able to do another type of job. You could work as a telemarketer, an operator, a gas station attendant, or a parking lot attendant." As a result, they may terminate your benefits, claiming that there are jobs you can do.

This is the standard denial we see regularly at Preszler Injury Lawyers. Once a claim has been denied, a person really has two options. The first option is to do nothing, which frankly is what a lot of people do. They figure their policy only provided coverage for two years and they don’t understand this other test, so they choose not to take any action. The second option is to file an appeal. There are different types of appeals: an internal appeal and an external appeal. The internal appeal is where you appeal to the insurance company themselves. However, I have never really seen an appeal to an insurance company be accepted because most people are just submitting the same information that the insurance company already had, which was still insufficient to satisfy them to continue your long-term disability benefits.

The option where we get involved is through what is called an external appeal, where we actually commence a lawsuit against the insurance company. At the end of the day, when you've been denied your long-term disability benefits, it is really a denial of coverage or a breach of contract case. When an insurance company is in breach of their agreement, you have only one avenue of recourse, which is to litigate against them to ensure they hold up their end of the bargain—the part of the bargain you expected them to satisfy for which you've been paying premiums for years.

Through litigation, we are able to prove that you are unable to perform any job for which you are reasonably suited, which directly contradicts what the insurance company is saying. We use a variety of techniques to do so, including expert evidence, vocational evidence, and various other types of litigation strategies that we employ to convince the insurance company that you, in fact, satisfy the test that enables you to receive coverage.

Now, that coverage lasts technically up to the age of 65, and this is an area that most people overlook. They think these policies are only for two years, which is generally incorrect. These policies actually last up to the age of 65; it is just that the test changes after two years. Lawyers are key to this equation. Without lawyers, insurance companies are able to deny claims with no consequences. Insurance companies respond to risk, and the only way to create risk for an insurance company is to litigate against them. Litigation levels the playing field and allows you, as the client, not to have to worry about dealing with the insurance company.

There is no doubt that you have had a very unpleasant relationship with the insurance company to date. That is often why people contact us. They feel that they are not listened to or heard. They feel that despite providing every bit of information the insurance companies have ever asked for, it is still not enough. The insurance companies' desire for more information is insatiable, and people are generally overwhelmed.

What is often overlooked is that people who are on long-term disability benefits are already not doing well. Their illnesses or symptoms are profound, making it difficult for them to perform their job or any job. They are having difficulty functioning on a daily basis, and it is these individuals who are inherently vulnerable. Their circumstances make it difficult for them to take on an insurance company on their own, especially when they are constantly being asked for updates and documents. It is a totally overwhelming process that often leads to a denial.

As lawyers, we take over and ensure that you do not have to worry about that.

You end up focusing on yourself and getting better while we deal with the insurance company. If you have been met with a long-term disability denial or even a short-term disability denial, feel free to give me a call. My name is Jeffrey Preszler at the Preszler Injury Lawyers. My law firm can assist you in disputing any denial from a long-term disability carrier, and we can help secure the compensation and benefits that you are duly owed.