In some cases, a disabled employee may be able to file a disability claim that allows coverage to continue under the employer’s group life insurance plan for free. This is commonly referred to as a “premium waiver” or “disability premium waiver” benefit, and usually continues for the duration of the disability (or until a benchmark age, such as age 65). Disability premium waiver benefits aren’t limited to employer-sponsored plans. Such benefits may also be available for individual self-paid life insurance policies and for group life coverage provided through an association. Many professional societies, such as the ABA, AMA, AICPA, etc., offer life insurance coverage to their members through such association plans.
Disability premium waiver benefits may be handled automatically where, for example, the same insurance company insures both the employer’s long term disability plan and its life insurance plan. In such cases, the insurer may accept a single claim form for both long term disability income replacement benefits and for life insurance disability waiver of premium benefits. However, in other cases, the disabled employee will be required to file a claim and must do so near the end of the waiting period, which is typically anywhere from 6 to 12 months.
Even if a disabled employee has no dependents and does not view the life insurance coverage as an important financial planning component for the employee’s family, submitting a claim for disability waiver of premium benefits should not be overlooked. If the employee has already applied for long term disability benefits, much of that claim information may be re-purposed for the disability waiver of premium claim. So, the disability waiver of premium benefit may be obtained with little additional effort. Since many life insurance plans have accelerated benefits, continued disability waiver of premium coverage may provide for payment of life insurance proceeds directly to the employee in certain circumstances – typically where the employee has a life-threatening illness and/or received a terminal prognosis.
The definition of disability required to obtain disability premium waiver benefits can vary, as is the case with long term disability benefits. Depending on the life insurance plan, the claimant may have to be disabled from “any occupation,” the employee’s “regular occupation,” or the employee’s “own occupation.” Although life insurance coverage and long term disability coverage may be offered by the same insurance company, the disability standard may be different as between the two plans.
An employer-sponsored life insurance plan may contain both a conversion right and a disability premium waiver provision. Some plans may require that the disabled employee first convert to a self-paid individual policy in order to be eligible for disability premium waiver benefits. In other cases, an employee may want to convert coverage – pending approval of a disability premium waiver claim – to ensure that life insurance coverage is securely in place. If conversion rights are not exercised during the conversion period, the right to continued life insurance coverage may be lost entirely if the disability premium waiver claim is later denied.
Our lawyers can help to identify a disability premium waiver provision, advise as between conversion and disability premium waiver benefits (when both are available, see “Conversion Rights” section), submit a targeted claim for disability premium waiver benefits, or appeal a denied premium waiver claim.
Mark Scherzer Law :: Long Term Disability Appeal Lawyers :: Disability Waiver of Premium Claims
New York Disability Attorneys (including Sullivan County, Ulster County, Dutchess County, Delaware County, Greene County, Columbia County, Albany County and Rennselaer County)