Individual disability insurance: An overview (and what to do if your claim is denied)

Planning for the future allows us to create a safety net in case the unthinkable happens. A serious injury or debilitating disease could make any of us unable to work. However, one way to prevent suffering a huge financial loss is to purchase an individual disability insurance policy (IDI). The policy may require an extra expense every month, but an IDI can provide you with protection in the event that you need disability benefits.

Below we’ll discuss exactly what IDIs are, as well as what you can do if the insurance company does not hold up its end of the bargain. Unfortunately, sometimes insureds must seek legal help to get the benefits they need from disability insurance policies.

IDI in a nutshell

Long- and short-term disability insurance policies can be purchased individually (IDI) or provided by an employer. Some people purchase IDI when coverage is not available through the employer. Still, some people purchase IDI to complement the policy they have from work. In many cases, people who purchase IDI are doctors, dentists, lawyers and other professionals.

Typically, IDI policies pay about 40 to 70% of the policyholder’s salary if their disability prevents them from working in their former occupation. However, IDI policies vary in the amount of time that benefits last:

• The coverage for long-term policies can last up to 5 years, until retirement age and in some cases until the policyholder’s death.
• Short-term policy coverage usually lasts between 13 and 26 weeks.

It’s important to note that every policy is different, and each insurer offers different benefits.

What if the insurer denies any portion of or all the benefits you need?

After paying for any kind of disability insurance, most people are shocked if the insurance company denies coverage. This can happen for multiple reasons, and sometimes the denial amounts to insurance bad faith. If your IDI benefits are denied in part or in whole, you should speak with an attorney with ample experience in this niche area of law. A denial of benefits is not the end of the road, and an experienced disability insurance lawyer can help you get the benefits you need and deserve.

For more on these matters, please see our overview of Individual Disability Insurance and fighting denied claims.