The Truth about Disability Insurance: Consult an Experienced Insurance Lawyer First

A recent article in the Huffington Post became a prime example of the need for expert advice when it comes to insurance.

March 27, 2013

A recent article in the Huffington Post became a prime example of the need for expert advice when it comes to insurance. While the article highlighted some of the abuses of insurance companies and the methods they use for denying claims, it also reinforced common misperceptions about this important type of insurance.

"One of the biggest mistakes people make is missing the appeal deadline. While the article cites that ERISA has a 60-day appeal deadline, that's not exactly true. This varies by policy. Generally, the appeal deadline is actually 180 days, not 60. Knowing what type of policy has been bought and how to properly and timely appeal if denied, eliminates fatal disability claim mistakes," says Frank N. Darras, America's top insurance lawyer.

Another common misperception is that all disability policies are governed by ERISA. In reality, policies insuring most state and local governments, schools and churches aren't governed under ERISA. Consulting a top disability lawyer before anyone initially files a claim is crucial, as one must know whether filing a suit is a reality, when there is a denial or the requirement for an administrative appeal

"The United States government has exempted itself and its employees from ERISA. It is terrific for those who are ERISA exempt because ERISA applies harsh guidelines and leads to higher rates of claims denials. It's really an unfair environment. It can mean one person gets their claim denied while a person with the same restrictions and limitations doesn't, simply because of who they work for," says Darras.

Despite these pitfalls, a recent study by the Council for Disability Awareness stresses the importance of investing in a long-term disability policy. According to the 2012 Long-Term Disability Claims Review, the number of long-term disability claims has continued to rise for the fourth year in a row while the number of wage earners protected by disability insurance continues to decline.

"This is an unfortunate reality. The need for this type of insurance is clearly there, but people are refusing to see value in it. Sadly, the group who depends on their income the most - the 20 and 30-somethings - are the least likely of all age brackets to have disability insurance. This notion of invincibility is scary and will leave them unprotected. Accidents happen and the 25-year-old who must rely on disability insurance is less likely to have the resources to support themselves compared to the 55-year-old who has spent years saving and building their portfolio," says Darras.

Whether 25 or 45, Americans should make it a priority to research and invest in disability insurance. Buy disability insurance individually from a trusted agent or broker and pay the premiums personally so if disability strikes, benefits are tax free. With individual coverage, ERISA doesn't apply. If the individual disability carrier wrongfully delays or unreasonably denies benefits, a lawsuit can be filed, knowing there are rich consumer remedies to hold the insurance company accountable.