Can you lose your LTD benefits? The short and tragic answer is yes, and it happens to many disabled individuals. The issue is hinged on the definition of ‘disability’ as defined in your insurance policy. We often handle cases where someone’s disability was terminated, about two years after the disability payments began.
There are two definitions of disability in your insurance policy; “own occupation” and “any occupation.” From the time your disability policy becomes active, you are in a period where you are considered disabled from performing the duties of your regular occupation. For example, if you are a surgeon and you are diagnosed with Parkinson’s disease, you are clearly unable to perform your current duties. Before the rollover into “any occupation,” an individual in this situation is entitled to their benefits.
The tricky part comes after your insurance is rolled into the “any occupation” period, which lasts through the remainder of your paid benefits. The actual definition varies based on your insurance policy, but it generally reads “whatever new job we propose must pay you xx% of your pre-disability income.”
For example, a construction worker who is disabled after an accident may be denied benefits after the own/any occupation rollover. According to the insurance policy, they are able to perform an occupation that pays certain percentage of their previous income.