|
 |
No matter what financial plans you have made for
the future, there is one pitfall that many of us often overlook: the possibility of
suffering a serious illness or injury before retirement age that could result in a
long-term disability.
My recent experience forced me to recognize some common myths and assumptions regarding
medical benefits that often lead to a false sense of security.
MYTH NUMBER 1: It can’t happen to me.
Insurance salesmen are quick to point out that you are more likely to suffer a major
illness than death before retirement age. They are right! I was diagnosed with uterine
Cancer in 1991. Fortunately, I lost less than six months from the time of diagnosis until
my return to work. However, against the odds, I was hit with serious medical problems a
second time just a few years after the first. But, this time the recovery was not
as quick.
MYTH NUMBER 2: I'm covered by my disability policy.
Don’t be so sure!! Read the small print.
The fact that basic long-term disability coverage was provided by my employer for any
injury or illness lasting more than 26 weeks was very comforting. I even paid the
additional premium for the maximum coverage...70% of my salary.
So, when my illness lasted longer than 26 weeks I applied for my benefits. Imagine my
shock when my claim was denied by the insurance coverage because I did not meet the
insurance company’s definition of "disabled"!!
That’s when I discovered the Plan Document.
What is The Plan Document?
The Plan Document is that part of the insurance policy that contains the terms and
conditions that dictate the way the policy benefits are applied.
According to the Policy Plan Document the insurance company has the sole right to
determine the definition of "disability" according to my employer’s plan.
Therefore, in spite of the fact that my medical disability was extended for more than 26
weeks by my doctor, the insurance company could deny my claim because my illness did not
fit their definition.
My advice:
- Contact a financial planner to assist in reviewing and selecting the best LTD policy for
you.
- Insist on getting a copy of the Plan Document, or a copy of the entire insurance policy
before making your purchase.
MYTH NUMBER 3: I'm covered by state disability.
When the Long Term Disability benefits through my employer were denied I immediately
applied for, and received, benefits through the state. But, the amount was small compared
to the salary I was used to, and inadequate to pay my monthly bills.
My advice:
- Make sure your savings plan includes money to supplement any state or federal plan to
insure you have the income you will need each month.
MYTH NUMBER 4: I can't lose my job when I am on
disability.
Employers are not required to hold your position open for you if your absence creates a
hardship for them and someone is needed in your position.
Reality:
My advice:
- Find out what your company’s policy is concerning long-term disability and job
protection.
MORE » |
