Impact of Other Benefits on Your Group Disability Income Insurance Benefit
Social Security claims
Often the insurance company will arrange for a third party firm to handle your Social Security claim. Be cautious here: there may be no attorney-client relationship with the third party. Therefore, any information you give to that third party may ultimately be forwarded to the insurance company for their use in reviewing your claim with them. Unfortunately, the medical proof of disability cannot be forwarded by the Social Security Administration or the third party to your insurance company. As a result, it is possible that the insurance company retains the benefits of the Social Security offset, usually in a substantial lump sum repayment, but then later terminates or denies your disability claim as lacking proof of disability.
Workers Compensation settlements
The policy itself must be examined to determine the impact of a Workers Compensation award on the amount of your benefits.
One of the most important aspects of the relationship between Workers Compensation and group disability income insurance claims occurs in the execution of a release pertaining to the Workers Compensation claim. You can inadvertently waive your group disability income insurance benefits by executing a Workers Compensation settlement agreement that releases the employer from all unknown claims if the employer can successfully assert that it was not formally notified of your anticipated group disability income insurance claim at the time of the settlement.
Also, the apportionment of the settlement can affect the right of the insurance company to offset the full amount of the Workers Compensation settlement against your group disability income insurance benefits. Every group policy is a separate insurance policy and contains different terms regarding the types of benefits that may be offset. Often a policy will offset only the portion of a Workers Compensation award or settlement that is allocated to loss of income. Under those policies, it is important to structure a Workers Compensation settlement to maximize the group disability income insurance benefits available to you.
With all of these offset situations, you would be wise to seek legal counsel to guide you through the details to make sure you dont unwittingly give away benefits to which you are entitled (or worse, pay back an alleged overpayment).