Understanding Long-Term Disability Insurance Benefits And Social Security Benefits
Some people are fortunate enough to have monthly long-term disability (LTD) insurance benefits through an LTD company (Unum, Hartford, Provident, etc.). Many of these benefits are provided by your employer as a part of an employee’s benefits package and are taxable benefits.
If I Have LTD, Does It Affect My Social Security Disability Benefits Or Eligibility?
Almost all LTD plans now require a claimant who has been off work for 12 months to pursue a claim for Social Security Disability Insurance benefits. And, after the favorable decision from Social Security, almost all LTD plans require the claimant to reimburse the LTD plan with all benefits paid by Social Security to the claimant and any dependents.
Many LTD plans do not have annual cost-of-living adjustment (COLA) provisions; the LTD benefits being paid are the same every year. Most LTD plans only require being repaid at the base rate initially awarded by Social Security.
Can My LTD Help Pay For My Attorneys’ Fees?
Many LTD insurance plans provide a claimant with a credit for the amount of any attorney fee paid from his or her past-due Social Security benefits. The amount you owe to the LTD company is the amount of benefits paid by Social Security less any attorney fees and less any annual cost of living inflation adjustment.
If you receive or may be eligible to receive long-term disability (LTD) insurance benefits, you will want to discuss this with your attorney as early as possible.