Let’s imagine you are a working person and your employer has decided to add something new to the disability benefits that will give employees more choices. You learn about a disability insurance option that allows you to buy varying types of coverage. Sort of like buying car insurance – you can pay a lower premium and get a higher deductible.
If this sounds like a good idea to you, then you don’t read this blog often enough.
Sun Life Financial has recently launched Voluntary Short Term Disability (VSTD) and Voluntary Long Term Disability (VLTD). Employees can select what portion of income or a specific dollar amount that will be replaced if they need to file a disability claim, an elimination period and several options on how long the policy would apply for a qualifying disability.
As long term disability insurance lawyers who fight for our clients against insurance companies every day, we’re skeptical. To us, this is a way to price polices so policyholders will not have enough disability insurance coverage. Even worse, because the policies are purchased through their employer, they are under the ERISA umbrella. That means fighting for the policy must be done through the administrative process first, which can drag on for years, and the insurance companies hold all the cards.
Our opinion? If you need a disability insurance policy, buy it privately through a reputable insurance or financial professional. Don’t get stuck in ERISA land. Make sure that the monthly benefit will replace the income you will lose if you are unable to work because of an accident or injury.
Privately owned insurance policies are not governed by ERISA. If you have a problem with a denial or a delay or even a termination while you are on claim, the battle can take place on relatively even ground – the court system – versus the administrative appeals process, where restrictions make even an obvious case a challenge.
If you need more information about your disability insurance policy, or about the one you are considering purchasing, call our office. You are not in this alone.