I read the July 17 article “Employers dropping long-term disability insurance,” and I was not surprised that employers and employees are cutting long-term disability insurance.
Several years ago, while working in Connecticut, I became disabled and could no longer work. After three months of short-term disability and some paperwork to prove I was disabled, my long-term disability insurance payments began.
I thought I might be OK receiving 60 percent of my base pay until age 65. Since my employer paid part of the long-term disability insurance premium, this income was taxable.
After three months, the insurance company said they would stop payments unless I applied for Social Security Disability. This required a ton of paperwork, and to avoid legal fees, I completed the application myself. I qualified, but Social Security requires a two-year wait, then sends a retroactive payment. They even included some money for my teenage daughter.
The long-term disability insurance company immediately demanded that I return all of the payments they had sent me – plus the money Social Security paid to my daughter – or they would take legal action. Fortunately, I had some money saved and avoided the legal mess. The insurance company continued to deduct my payments and my daughter’s payments from Social Security, until she turned 18 and I turned 65.
Anyone thinking about buying a disability insurance policy should read the policy documents carefully. It may not be what you think it is.