The type of disability insurance policy you own can affect the benefits you receive and the legal rights to which you are entitled. Below is an outline of the standard types of disability insurance policies.

Individual Disability Insurance:

As the name implies, individual disability insurance policies are those purchased by individuals directly from the carrier and provide long term disability benefits in the event of sickness or injury. Individual polices fall into two categories: general and occupational. A “general” disability policy insures against a sickness or an injury which precludes the insured from performing any work while an “occupational” policy provides benefits if the insured cannot perform the material and substantial duties of his or her own occupation. Thus, an “occupational” policy will provide greater coverage to the insured, who will be entitled to benefits even if he or she is able to work in another occupation. Individual policies generally provide coverage in set amounts, for example, $5,000 per month, rather than a percentage of the insured’s salary.

Group Disability Insurance:

Group disability insurance polices are made available to organization members, such as members of the American Medical Association. Unlike most individual policies, group policies typically calculate benefits as a percentage of the insured’s base salary, usually from 50-75 percent. These policies may limit the maximum amount of benefits payable, for example, no more than $5,000 per month, regardless of base pay. Additionally, group policies often reduce benefits when the insured receives income from other sources such as Social Security disability benefits or worker’s compensation.

Employer-Sponsored Disability Insurance:

Employer-sponsored disability insurance policies are typically the least expensive policies and are similar to the “group” policies described above.  These policies provide employees with disability insurance based on a percentage of their base salary as part of the employer’s overall benefits package. Unlike group policies, however, employer-sponsored policies are governed by the Employee Retirement Income Security Act of 1974 (ERISA). Unfortunately, ERISA deprives insureds of significant rights to which they would normally be entitled under state law. These include the right to a trial by jury and the possibility of punitive damages if the insurer has acted unreasonably or maliciously.

Ed Comitz and the disability insurance attorneys at Comitz | Beethe protect the disability insurance benefits of physicians and healthcare professionals nationwide. We provide disability income claim advice, assistance with filing disability claims, including completion of disability claim forms and representation in disability insurance litigation.