Disability Insurance Law FAQs

Do I need disability insurance?

Most people do not realize that their biggest asset is not their house or retirement savings; it is their ability to earn a paycheck.  You insure your home against fire and other disasters.  But most people do not insure their earning capacity.  In Illinois and surrounding Midwestern states, employers are not required to provide disability insurance or to pay employees who become disabled and cannot work.  Employers are required to carry workers’ compensation insurance, which pays for injuries received on the job.  But if your disability is not related to your job, your only disability insurance is Social Security Disability, which pays only for total long-term disabilities and does not kick in until the sixth month after your disability began.  Private disability insurance can be short-term or long-term.  Short-term policies cover at least a portion of the Social Security waiting period.  Long-term policies usually provide coverage for partial as well as total disability.  Generally, the younger you are, the more you need disability insurance, unless you have sufficient savings or investments to live on if you cannot work.  You can buy private disability insurance and pay for it yourself or negotiate with your employer to pay for it, or at least for a portion of it.

How does disability insurance work?

When an insured becomes unable to work, and after the waiting period stipulated in the policy, the insurer makes periodic payments to an insured that represent a percentage of his or her working income.  Often that figure is 60 percent.  Short-term disability insurance covers periods from two weeks to two years, while long-term disability insurance usually will pay for up to five years or until age 65.  Special policies continue contributions to retirement plans.  Some policies include future cost-of-living adjustments.  The policies might also be non-cancellable and might have a guaranteed right to renew or purchase additional coverage.  Be sure to look at the policy’s definition of “disabled.”  Does it mean total disability or does it include partial disability?  Does it mean that you cannot work at any job or that you are prevented from working in your own occupation?  These terms are all negotiable at the time you purchase the insurance, but they cannot be changed later on, after you are disabled.

Who determines whether I am disabled?

Initially, you apply for disability insurance benefits based on what your treating doctors say.  If your insurance company has any questions, the policy might provide that you have to be examined by a doctor of its choosing.  If that doctor disagrees with your doctors, your claim may be denied.  Your policy might provide for arbitration to resolve such disputes or you may have to go to court to force the insurance company to pay.  In either case, you will need a good disability insurance benefits attorney to help you.  Insurers will certainly have attorneys representing them.  With our chicago attorneys, you can have equally skilled and professional representation.

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