Most people who rely on Long Term Disability insurance to pay the bills are understandably concerned when their LTD claim is denied. If your coverage is employer-provided, then it is likely governed by The Employee Retirement Income Security Act of 1974, better known as ERISA. If you have employer-provided LTD coverage, then it’s likely that you have an ERISA-governed life insurance policy as well. Typically, your life insurance will continue with premiums waived while you are considered disabled. The denial of LTD benefits, however, will often trigger a denial of the premium waiver for the life insurance policy as well.
Some people don’t worry about the premium waiver because they’re focused on the LTD claim. This is a mistake. If your disability is due to a chronic medical condition, as so many are, then you may find it difficult to find replacement life insurance when you lose your employer-provided coverage. Worse yet, if your chronic condition results in your death, then your loved ones may find themselves with no benefits just when they need them most.
If your premium waiver claim is denied, you must appeal it within 180 days, just like you do your LTD claim. When I submit an LTD appeal for my client, I typically submit an appeal of the denial of a premium waiver claim at the same time. If the LTD appeal is denied and we have to file a lawsuit, we include the premium waiver in the lawsuit filing.
Typically, when the LTD appeals are successful, the premium waiver appeal is granted as well. If no premium waiver appeal was sent, however, then the life insurance coverage will likely end and can never be reinstated. Since this is the only life insurance many disabled people will qualify for, it is crucial that the coverage be protected by filing a timely appeal.
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