Since I am on the issue of life insurance coverage (see my other blog post of today’s date), I take this opportunity to remind all readers of a little known provision likely found in your employer-provided, group life insurance policy — commonly referred to as “life waiver of premium” (“LWOP”). I have yet to review a group life insurance policy which does not contain a waiver of premium provision. This provision provides the employee with the right to continue with this life insurance coverage under the group policy if the employee has become “disabled.” Such coverage will continue so long as this person continues to meet the definition of disability (as contained within the life insurance policy and not the definition found in an accompanying long-term disability policy) and even if the employee is no longer employed with that employer. In order to be “disabled” under the life insurance policy’s waiver of premium provision, one typically must prove the inability to perform the material and substantial duties of “any occupation.” Whereas, the typical group long-term disability policy contains a definition of disability, at least for the first 24 months of the claim, that only requires the participant to prove the inability to perform the material and substantial duties of their “own” or “regular” occupation. This can be significant but not such a huge difference that an individual should not seek continued coverage under life insurance policy.
How to File an LWOP Claim
In order to obtain ongoing life insurance coverage under the waiver of premium provision, most employers or insurance companies will require that you submit a separate claim under the life insurance policy, specifically claiming ongoing coverage under the LWOP provision.
There are deadlines for filing an LWOP claim. Consult your policy. These deadlines may be as short as 30 days or up to one year or greater. Each policy is different.
When I meet with potential new clients who have suffered a denial of their claim for long-term disability benefits, greater than 95% (or higher) of them will have no idea that their life insurance coverage can continue under the LWOP provision. Check your life policy; know and pursue your rights. Feel free to contact us if your life claim has been denied or you require assistance in converting.