Insurance is confusing. The insurer wants it to be confusing so that you will not know how to fight back when they try to pay you less than what you are entitled to. Below we provide some very quick answers to common questions to help you understand the very basics. But to fully fight back against these companies, you will likely need the assistance of an experienced insurance lawyer. Castle Legal Group has you covered.
What is Long-Term Disability (LTD) Insurance?
LTD insurance provides wage replacement if an individual is unable to work due to a disability, typically covering 50-70% of pre-disability earnings.
How do LTD and Short-Term Disability Insurance differ?
Short-term disability provides benefits for a limited time, usually weeks to months, while LTD benefits start after a waiting period and continue until the policy limits or until the individual can work again.
What are the main types of LTD insurance?
The two primary types are private LTD insurance, which is purchased individually, and ERISA LTD insurance provided through an employer.
What does filing an LTD claim entail?
It involves providing detailed medical information to the insurance carrier to qualify for benefits, often after a waiting period.
What is an LTD denial letter?
It’s a notice from the LTD carrier explaining why a claim for benefits has been denied, with the policyholder having the right to appeal.
Can LTD insurance be used alongside Social Security Disability Insurance (SSDI)?
Yes, but some LTD policies may offset the benefits by the amount received from SSDI.
What are common reasons for SSDI and LTD claim denials?
Denials can be due to insufficient medical evidence, failure to meet eligibility criteria, or lack of supporting documentation.
What should you do if your LTD claim is denied?
Review the denial reasons and file an appeal, first internally with the insurance company and possibly in court if necessary.
How does receiving SSDI affect LTD benefits?
LTD benefits may be reduced by the amount received from SSDI, depending on the policy.
What are the cost differences between SSDI and LTD?
SSDI is funded by payroll taxes and doesn’t require premiums, while LTD costs vary based on individual plans and coverage.
How important are medical records in an LTD claim?
Essential, as they provide evidence of the disability and its impact on the policyholder’s ability to work.
What is the role of disability attorneys in the claim process?
They provide legal advice, help understand policy terms, assist in claim preparation, and represent policyholders in appeals or litigation.
What is ERISA, and how does it affect LTD claims?
ERISA is a federal law that sets standards for most employer-provided insurance plans, influencing claims process and legal rights.
How do I maintain approval for LTD benefits?
Regularly submit required documents, like the Attending Physician Statement, and comply with policy terms to avoid surveillance issues.
What are some exclusions and limitations in LTD policies?
These can include mental health conditions, chronic pain, and pre-existing conditions.
How do insurance companies use surveillance and monitoring?
To investigate the activities of claimants and assess the legitimacy of their disability status.
What's the difference between “own occupation” and “any occupation” in LTD policies?
“Own occupation” means you can’t perform your specific job, while “any occupation” means you can’t do any job for which you’re qualified.
What is the age 65 provision in LTD claims?
It typically indicates that benefits will cease when the policyholder reaches age 65.
What should you do if your LTD benefits are surveilled or monitored?
Be cautious of social media use, ensure consistency in your claims, and consider legal assistance if necessary.
How can LTD insurance claims be appealed?
Through the insurance company’s internal process and, if unsuccessful, potentially through legal action.
What should I do immediately after property damage occurs?
Document the damage with photos or video, secure the property from further loss, and contact your insurance company to report the claim.
How quickly must I file a claim after damage?
File as soon as possible, but policy specifics vary; check your policy for the exact timeframe.
Can I make temporary repairs?
Yes, you should make temporary repairs to prevent further damage. Keep receipts for potential reimbursement.
Do I have to use the insurance company's repair service?
No, you’re entitled to choose your own contractor, but ensure they’re licensed and reputable.
What if my claim is denied?
Request a written explanation for the denial and consider seeking legal advice or a second opinion.
Are living expenses covered if I'm displaced from my home?
Most policies include Additional Living Expenses (ALE) coverage for necessary temporary living costs.
What is a public adjuster, and should I hire one?
A public adjuster represents you to negotiate with the insurance company, which can be helpful for large, complex claims.
What's the difference between replacement cost and actual cash value?
Replacement cost pays for the full cost to repair or replace the damaged property, while actual cash value includes depreciation.
Will my rates increase after a claim?
They might, depending on the nature and frequency of claims, but it’s not guaranteed.
What is a deductible, and how does it work?
A deductible is the amount you pay out of pocket before insurance coverage kicks in.
Can I dispute the insurer's valuation of my loss?
Yes, you can dispute it and provide evidence or an independent appraisal to support your claim.
Are floods covered by homeowners insurance?
Typically, no. Flood insurance is usually a separate policy.
Does homeowners insurance cover earthquake damage?
Earthquake damage is not usually covered and may require separate earthquake insurance.
What if my property is underinsured?
You may not be fully reimbursed for your loss. It’s vital to regularly review and update your coverage.
How long does it take to settle a claim?
It varies, but insurance companies in California generally have 40 days to accept or deny a claim after receiving proof of loss.
What if I find more damage after the claim is settled?
You can reopen the claim. Report the additional damage to your insurer as soon as possible.
Is mold damage covered by homeowners insurance?
Coverage for mold varies by policy and the cause of the mold.
Are stolen items from my home covered?
Yes, personal property theft is typically covered under homeowners insurance.
What is loss of use coverage?
It covers additional living expenses if your home is uninhabitable due to a covered loss.
Can I cancel my insurance claim after filing it?
Yes, you can cancel a claim, but the claim will likely appear in your insurance history.
What happens if my home is a total loss?
The insurance company should pay the policy limit, minus any deductible.
Are personal injuries on my property covered?
Yes, liability coverage in your policy should cover personal injuries.
How do I document my lost belongings?
Create a home inventory list with descriptions and costs, and provide any receipts or photos you have.
What is a claims adjuster?
An adjuster is an insurance company representative who assesses the damage and estimates repair costs.
Can my insurer drop me after a claim?
Insurers can choose not to renew a policy for various reasons, including claims history, but they can’t cancel a policy mid-term without valid reasons.
What do I need to file a life insurance claim?
You’ll need a copy of the death certificate, the policy document, and the completed claim form.
How soon after a death should I file a claim?
It’s recommended to file as soon as possible, typically within 30 days of the death.
Will a life insurance policy pay out for any cause of death?
Most policies cover a variety of causes, but there may be exclusions such as suicide within the first two years.
What if the policyholder dies during the contestability period?
The insurer may investigate the claim more thoroughly, which can delay payment.
Are life insurance benefits taxable?
Generally, life insurance death benefits are not subject to income tax for the beneficiary.
How long does it take to receive the death benefit?
Once the claim is filed, it can take a few weeks to several months, depending on the circumstances.
What is an incontestability clause?
It’s a clause that prevents insurers from denying payment after the policy has been in force for a certain period, usually two years.
Can I get an advance on the death benefit?
Some insurers offer an accelerated death benefit or living benefit that can be accessed before death in certain circumstances.
What happens if a beneficiary is not named?
The proceeds typically go to the estate and are distributed according to the deceased’s will or state law.
Is accidental death covered by life insurance?
Yes, accidental death is typically covered, and some policies may pay an additional benefit for accidental death.
What if the policyholder dies in a foreign country?
The claim can still be filed, but additional documentation may be required.
Can a life insurance company refuse to pay?
An insurer can refuse payment if the policyholder misrepresented themselves on the application or if the death is due to an excluded cause.
What's a policy lapse, and can it be reinstated?
A lapse occurs when premiums are not paid; reinstatement is possible within a certain period if back premiums are paid.
How are life insurance proceeds paid out?
They can be paid as a lump sum, annuity, or in instalments, depending on the policy terms and beneficiary’s choice.
What if the policyholder outlives the term life insurance?
The policy expires with no benefit paid; some policies may offer renewal or conversion to permanent insurance.
Can a life insurance claim be contested?
Yes, beneficiaries can contest a claim denial, typically by providing additional information or through legal action.
What's the difference between term and whole life insurance?
Term insurance provides coverage for a specific period, while whole life insurance offers lifelong coverage and a cash value component.
Are life insurance benefits subject to probate?
Generally, they bypass probate if a beneficiary is named, but they may be subject to probate if the estate is the beneficiary.
What if the beneficiary is a minor?
A guardian may be appointed to manage the proceeds until the child reaches legal age.
Can a beneficiary be changed after the policyholder's death?
No, beneficiary designations cannot be changed posthumously.
What is a beneficiary dispute, and how is it resolved?
It occurs when there’s a disagreement about who is entitled to the proceeds; it can be resolved through mediation, arbitration, or court action.
How do I know if I'm a beneficiary of a life insurance policy?
You can contact the insurance company, check the deceased’s personal records, or use a policy locator service.
What does 'per stirpes' mean in a life insurance policy?
It means if a beneficiary predeceases the policyholder, their share will pass to their heirs.
Are funeral expenses covered by life insurance?
They can be if the beneficiary chooses to use the death benefit for funeral costs.
What if there's a discrepancy in the policy?
Contact the insurance company for clarification; if unresolved, you may need legal representation.