Warning! Private disability insurance policies may
contain a Social Insurance Substitute Rider or Social Security Off-Set
which affects the amounts, and qualifying conditions, of disability
benefits paid through your policy.
When purchasing
an insurance policy, additional coverages may be added in the form of
"Riders." These may include increased coverage added in your favor, or
additional requirements and conditions of the policy which have been
added by the insurance company. Disability Insurance Riders can
dramatically affect the process and benefit payments of your policy, and
are among the least understood. Be prepared!
This Rider deducts payments for which you are eligible - through Social Security disability, retirement, workman's compensation, and/or occupational disease benefits - from your payable benefit amounts. The insurance Rider may require you apply for all social insurance programs before any policy benefits are approved. Often a daunting task, applying for these social insurances is a roadblock which may create real problems at a time when your benefit payments are essential.
This offset applies to policy premiums, residual, Cost of Living Adjustments (COLA), and partial disability benefits provided by your policy (and payable at the time of filing your disability claim.) COLA and possibly other, increases in benefits which occur after payments have commenced, may not lower your benefits. But this is not always the case.
The ultimate result of this offset could be devastating to consumers who anticipate receipt of social plus private disability payments. Should the total of payable social benefits be equal to your disability insurance benefits, the insurer will pay you nothing. When purchasing long term disability insurance, be certain you understand the effects and implications of the Social Insurance Rider. Your insurer may require you to submit claims to these social services, even if denial is certain, before they will process your claim; and the amount of deduction varies between policies.
When a claimant is approved for social insurance payments, these may be lump sum social benefits which are pro-rated to offset your monthly insurance benefits, again, potentially reducing your private disability insurance benefits up to the full amount you expected to receive.
Essentially, this means even though you have paid your premiums in good faith, and you hold an insurance policy in good-standing, your insurance policy caps the total benefits you may collect, and requires social insurance to pay first. If you have questions about your SIS Rider, or have filed claims and are finding yourself stuck in a quagmire of endless paperwork, seeking expert counsel may be beneficial in cutting through the red tape.
This Rider deducts payments for which you are eligible - through Social Security disability, retirement, workman's compensation, and/or occupational disease benefits - from your payable benefit amounts. The insurance Rider may require you apply for all social insurance programs before any policy benefits are approved. Often a daunting task, applying for these social insurances is a roadblock which may create real problems at a time when your benefit payments are essential.
This offset applies to policy premiums, residual, Cost of Living Adjustments (COLA), and partial disability benefits provided by your policy (and payable at the time of filing your disability claim.) COLA and possibly other, increases in benefits which occur after payments have commenced, may not lower your benefits. But this is not always the case.
The ultimate result of this offset could be devastating to consumers who anticipate receipt of social plus private disability payments. Should the total of payable social benefits be equal to your disability insurance benefits, the insurer will pay you nothing. When purchasing long term disability insurance, be certain you understand the effects and implications of the Social Insurance Rider. Your insurer may require you to submit claims to these social services, even if denial is certain, before they will process your claim; and the amount of deduction varies between policies.
When a claimant is approved for social insurance payments, these may be lump sum social benefits which are pro-rated to offset your monthly insurance benefits, again, potentially reducing your private disability insurance benefits up to the full amount you expected to receive.
Essentially, this means even though you have paid your premiums in good faith, and you hold an insurance policy in good-standing, your insurance policy caps the total benefits you may collect, and requires social insurance to pay first. If you have questions about your SIS Rider, or have filed claims and are finding yourself stuck in a quagmire of endless paperwork, seeking expert counsel may be beneficial in cutting through the red tape.
Ray Bourhis
http://www.bourhis-mann.com
info@bourhis-mann.com
Insurance Policyholder Representation
415.392.4660
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info@bourhis-mann.com
Insurance Policyholder Representation
415.392.4660
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