We're bringing back “FAQuesday,” highlighting and answering the questions we hear most often from clients. Today's question is “what could impact the value of a long term disability claim?”

If your policy or plan document doesn't include any “other income” or offset provisions, then the value of a long term disability (LTD) claim will not be impacted.

However, most group policies contain these exclusions, and the value of the LTD claim could be impacted by things such as:

• Social Security Disability (SSD)
• Supplemental Security Income (SSI)
• Retirement
• 401(k) & Pension
• Other Disability Policies

Social Security Disability

Most policies include a Social Security Disability (SSD) offset provision that says something like: “If you receive Social Security Disability, then that will reduce the long term disability benefit.” It can be a dollar for dollar reduction, or there be an exclusion for what was paid to a Social Security Disability attorney, if that is applicable. Furthermore, the policy may require that you apply for SSD benefits.

For example:
$3,000 LTD benefit – $2,000 SSD benefit = $1,000 LTD benefit

Other Offsets

Supplemental Security Income (SSI)

• Some who are financially destitute will apply for Supplemental Security Income (SSI) while they wait for their SSD claim to be approved.
• The policy may have an exclusion or offset for SSI.

Social Security Retirement

• If a claimant is close to retirement age, becomes disabled, and applies for early Social Security retirement income, the policy may have an exclusion or offset for this type of benefit.

401(k), Pension & Other Disability Policies

• The policy could even contain an exclusion or offset for 401(k), pension benefits, and other disability policies.

Whether you or your client needs advice before applying or appealing for ERISA benefits such as long term disability, short term disability, life insurance, pension, or retirement, contact an experienced ERISA disability attorney at The Martin Law Group at 800-284-9309.

As required by the Alabama Rules of Professional Conduct Rule 7.2, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. The information presented in this video should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. Therefore, no information of any kind that you provide us before such a relationship is created is confidential or privileged.