LTD insurers have you file for SSD because they don't want to pay you what they owe
I came across a post in a forum and the poster essentially said: "I was approved for SSD disability benefits and had previously purchased a long term disability insurance policy. Now, the insurer is saying that they will offset my benefit amount by the amount of my monthly Social Security Disability benefits. Are they allowed to do this?"
Unfortunately, they are allowed to do this if it is spelled out in the provisions of the long term disability insurance contract (and it is always is). Why do insurance companies do this? The answer is simple---so they don't have to pay you the money you are entitled to...even though you dutifully paid the premiums of your long term disability insurance policy.
And it is for this reason that most LTD insurers will also require you to file for SSD disability benefits. They just don't want to pay.
The real question, in my mind, is -- should insurance companies be allowed to get away with this sort of nonsense? Again, the answer is simple and obvious. NO. It is unethical and immoral, and so typical of big business. Insurance is not an entitlement. It is something that an individual or family decides to pay premiums for to account for the possibility that they may suffer a loss of some kind (e.g. death or infirmity). Keywords in that last sentence are "pay" and "premiums".
Meaning that an LTD policy holder has held up their part of the bargain by paying premiums. Why, then, should the insurer be allowed to get out of their ethical responsibility to pay when a person becomes disabled?
In short, they shouldn't. However, they are allowed to because the current environment allows insurers to build these types of provisions into their policies.
The answer to this problem. In our representative form of government, the answer is Congress. Legislators should protect citizens in such a way that big insurance companies do not have the option of bilking policy holders out of premiums that they have little intention of making good on.
Unfortunately, Congress in the current climate cannot be counted on to protect the citizenry, not even those who are disabled or suffer from severe impairments. After all, the Social Security Disability backlog that exists has grown to near-epic proportions yet there is hardly a collective peep out of the legislative branch about doing something about it (hint: it takes additional funding to hire more warm bodies to get more work done so the backlogs can gradually be whittled down--doesn't take a rocket scientist to figure this out folks).
About the Author: Tim Moore is a former Social Security Disability Examiner in North Carolina, has been interviewed by the NY Times and the LA Times on the disability system, and is an Accredited Disability Representative (ADR) in North Carolina. For assistance on a disability application or Appeal in NC, click here.
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