Frequently Asked Questions (FAQs) about Disability Insurance and Disability Claims Denials
At Kingsley & Kingsley we field a variety of questions related to disability insurance and the claims process. We hope you find the following section of Frequently Asked Questions (FAQs) informative. Contact Kingsley & Kingsley today to arrange a free consultation with an experienced California insurance bad faith law attorney or call George Kingsley at (888) 500-8469 for a free consultation.
General Information about Disability Insurance
What is disability insurance?
Disability insurance plans are purchased insurance coverage that pays either a percentage of your income (up to 60% in most cases) or a set dollar amount if you can no longer work due to an accident or an illness. Your insurance policy premium (the amount you pay for the insurance) is higher the longer the benefit period (how long you can receive disability insurance payments).
There are two main categories of disability policies. There are short-term policies that last between six months and one year, and long-term policies that range from two years up until age 65. Both have elimination periods where no benefits are paid. Premiums are lower for policies that have longer elimination periods.
Disability insurance is designed to give you the opportunity to keep an income while recovering from an accident or illness. Although it is only a portion of your income, this financial benefit can help you meet some of your financial obligations.
If you have become sick or injured on the job and meet the definition of “total disability” in your disability insurance policy, and your disability claims have been denied, contact us now for a free consultation.
What is the difference between individual and group policies?
Disability insurance is intended to replace the loss of income due to a medical disability (physical condition or illness). Disability insurance coverage may be purchased by individuals on their own (this is known as an “individual policy”), or provided as a benefit by employers at no or low cost to employees (“group policy”). Income replacement benefits paid under a group policy are taxable. Benefits paid under an individual policy are not taxable, with the belief that the policy premiums were completely paid with after-tax dollars. Adequate income protection should include both a short term disability policy (STD) and long term disability policy (LTD) policy. Ideally, your STD policy will match the length of your LTD waiting period to ensure there is no lapse in coverage.
How Long-Term Disability Insurance Works
Long-term disability under a company-sponsored plan usually pays 60-80% of pre-disability earnings for a specific period of years or until age 65. To qualify, the employee must be unable to fulfill job duties for a maximum of 24 months. After that time, the definition of disability often shifts to include any occupation for which a person is trained, educated or suited.
After receiving disability benefits for 24 months, you may have to be “Social Security-disabled.” in order to collect payment. This means you cannot do any work for which you are trained, educated or suited. If you aren’t Social Security-disabled, your insurance company likely will claim you can work in some capacity (usually in lower level jobs with extremely limited physical requirements).
If you are a disabled employee and your group insurance carrier denies your legitimate claim, you could struggle to pay bills, lose possession of your assets and even lose your home. Making matters worse, you cannot collect those damages under Employee Retirement Income Security Act (ERISA).
When employees are denied their benefits, ERISA eliminates their right to punishment damages for emotional distress and the ability to a have trial by jury. Under ERISA, there also is no discovery so you won’t be deposed and your doctor and family members won’t be able to testify on your behalf. Without discovery (the process of obtaining evidence from the opposing party), it becomes extremely difficult for you to prove beyond a reasonable doubt the insurance company was wrong.
Our attorneys at Kingsley & Kingsley have the necessary skills and experience to help you get back those denied benefits.
All cases are handled on a contingency basis, which means, if you don’t obtain a recovery, there is no fee.
Contact Kingsley & Kingsley today and arrange a free consultation with an experienced ERISA attorney or call George Kingsley at (888) 840-5118 for a free consultation.
What steps do I have to take when my claim is denied?
The process to appeal a claim can be extremely difficult and time consuming. To complicate matters, each insurer has different processes and each policy has different terms. Appeals must be filed within a certain period of time following a denial. Meanwhile, medical records, testimonials, videos, and other evidence must be gathered and submitted into the case record within a certain length of time as well. Have an experienced attorney on your side can ease this process for you.
Kingsley & Kingsley is an experienced law firm known for helping disabled people obtain the disability benefits they deserve. Don’t hesitate to call our toll free number (888) 840-5118 or click here to contact us regarding your case.
Disability Insurance Claims
What questions should I ask before hiring an attorney to take my disability case?
For those looking for help with their disability insurance claims, choosing an attorney is an important step. However, it can often be difficult to determine whether a particular disability insurance attorney is the right one for you to work with. Here are three general questions to ask to help you evaluate a potential lawyer or law firm.
1. How many cases does the attorney take on each year?
2. What percentage of the attorney’s practice is devoted to disability insurance claims?
3. Does the attorney exclusively work with individual policy claimants, or does he/she handle ERISA and Social Security cases?
At Kingsley & Kingsley, we not only litigate for the disabled, we have experience with cases regarding insurance bad faith, ERISA, and rescission. We have the staff, resources, experienced trial lawyers, and the passion to litigate your disability law suit.
What is disability insurance bad faith?
Insurance companies establish contracts with policyholders to pay benefits if the policyholder becomes disabled or to pay medical bills due to accident or illness. When an insurance company fails to pay these claims and fails to deal fairly with policyholders, this is bad faith. Our law firm is dedicated to representing clients who have been unfairly treated.
Examples of insurance bad faith:
- Attempting to avoid paying benefits by unfairly claiming that the insured failed to disclose information when they filled out their health insurance application
- Denying disability benefits by unreasonably claiming that the policyholder is not disabled
- Unreasonably delaying the payment of benefits
- Refusing to pay a valid claim
- Refusing to investigate a claim
- Failing to properly communicate with the policyholder
- Wrongfully denying a claim by relying on biased medical providers (hired guns)
- Wrongfully denying coverage claiming pre-existing conditions
How We Can Help
Our experienced Los Angeles law firm of over 30 years will attempt to settle your case if possible, but if necessary we will investigate, gather evidence, develop an effective strategy, file and prosecute a lawsuit so you receive a fair and appropriate award.
All cases are handled on a contingency basis, which means, if you don’t obtain a recovery, there is no fee.
Contact Kingsley & Kingsley today to arrange a free consultation with an experienced California insurance bad faith law attorney or call George Kingsley at (818) 990-8300 for a free consultation.
Can Kingsley & Kingsley help me negotiate a settlement or buyout?
Yes, our attorneys often engage in settlement discussions on behalf of our clients. To determine the value of your policy benefits and engage in a productive discussion with the carrier, the policy’s present value must be calculated and factors such as life expectancy, setoffs, cost of living options, automatic increases and the personal needs of you and your family must be carefully considered and factored into the negotiation.
Kingsley & Kingsley attorneys possess the knowledge of the factors and tactics utilized by insurance carriers, have the required familiarity with insurance company, and a solid understanding of the legal process to help you obtain the benefits you deserve.
My disability insurance policy was canceled when I filed a claim. I paid my premiums; can my insurance company cancel my policy because I filed a disability claim?
It is not uncommon for an insurance company, in a disability policy, when faced with a claim to go back to the insured’s original application and scrutinize it for any reason to rescind (cancel) the policy altogether. When a company behaves in this way, their actions and motives should be thoroughly investigated to determine whether they actually had grounds to rescind, and whether their reason for doing so was based on business or bad faith.
Further, if the policy has not been in effect for at least two years, disability insurance carriers may attempt to rescind the policy by contending that the insured made material misrepresentations in their insurance policy. This process is called “post-claims underwriting,” which is illegal in California. If you are dealing with the rescission of your policy, we may be able to help you.
At Kingsley & Kingsley, our team of ten attorneys has a long history of going up against insurance companies when they are in the wrong. In addition to health and disability, we also handle casualty insurance claims involving fire, robbery, or earthquake insurance. If you have been denied medical or disability benefits, or if you feel that you have been unfairly denied benefits or inadequately covered on your home, fire, auto, or other insurance policy, contact Kingsley & Kingsley for a free consultation and evaluation of your situation.
Taxes and Disability Insurance Benefits
Do I have to pay taxes on short-term or long-term disability income?
The taxability of disability income insurance benefits depends in part on whether you pay in pretax or after-tax dollars. Generally, if you use pretax dollars to pay your premium, your benefits will likely be fully taxable. If you use after-tax dollars, your benefits won’t be taxable. If your employer pays all or part of the premium, or if your benefits are paid under a cafeteria plan, different rules can apply.
The income you receive from disability income insurance may or may not be taxable. The taxability of disability income insurance benefits depends on what type of benefits you receive, whether the premiums were paid with pretax or after-tax dollars, and who paid the premiums (you or your employer).
In the case of individual disability income insurance benefits, because you pay the premiums with after-tax dollars, the benefits you receive are tax free. However, you can’t deduct premiums paid for individual disability income insurance as a medical expense.
In the case of group disability insurance benefits, different rules may apply. If the employer gets the benefit, then the premium is not deductible to the company, and the benefit is not taxable when received by the company.
Payments from Social Security Disability (SSD) benefits are considered taxable income. However, because total income is limited for recipients of Supplemental Security Income (SSI), who may also need to meet income requirements to qualify for SSD, most people on SSD will not owe taxes on disability income. If your total income (or combined income if filing a joint return) exceeds government set thresholds, you may need to pay taxes on SSD income.
If you have been wronged by your employer or an insurance company, or if you are the victim of a personal injury, the caring attorneys at Kingsley & Kingsley are committed to helping you. Our Los Angeles wage and hour attorneys routinely represent workers during California wage claims and claims under California overtime laws.
To find out how we can help you, please visit our contact us page or feel free to give us a call at (888) 500-8469. Se habla español.