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Do I Have to Pay Back Long-Term Disability?


You are (finally) receiving the long-term disability benefits you deserve. Everything should be smooth sailing from here on, right? Maybe. Under limited circumstances, LTD insurers can demand repayment of disability benefits.

Bryant Legal Group’s long-term disability attorneys work closely with disability claimants, helping them navigate their benefits claims, understand their policies, and get the benefit payments they deserve.

In this post, we will take a closer look at circumstances in which you would have to return some of your LTD benefits—and how our disability insurance attorneys can help you every step of the way.

If the LTD Insurance Company Overpays You, It Can Demand Reimbursement

Sometimes, a long-term disability insurer will overpay a claimant. This might happen for a variety of reasons, but returning to work is the most common circumstance.

Returning to Work and Overpayments

Depending on the terms of your long-term disability policy, the insurance company might reduce or terminate your disability benefits when you return to work. If you are slow to notify the long-term disability insurer about your employment—or they are slow to act—you might receive an overpayment of benefits.

Some disability insurance policies may have a window of acceptable disability earnings that will not initiate a payback or termination of your long term disability benefits. Regardless, it is incredibly important to keep your insurer up to date and be well-read regarding your insurer’s policies. When in doubt, contact our expert disability attorneys for the guidance and information you need to navigate insurance overpayments.

In this case, the insurance company would be entitled to repayment. So, if you are returning to work, even on a part-time basis, it is important to notify your insurer as soon as possible.

Check Your Long-Term Disability Policy for Offset Provisions

Many (if not all) long-term disability policies contain an offset provision. If your circumstances merit an offset, you will have to reimburse the LTD insurance company. However, the situations that trigger an offset are limited.

Social Security Disability Benefits and Offsets

Many insurers have it within their policies to require you to apply for Social Security disability benefits. This is not to offer you more help, but to help them reduce their payments. If you are receiving private disability insurance and Social Security Disability Insurance at the same time, the insurance company may be entitled to an offset.

However, Social Security disability claims can take months and, in many cases, years to be decided. While your Social Security claim is pending, the LTD insurer will continue to pay your full monthly benefit.

But, if your SSDI claim is approved, the insurance company will expect reimbursement. For example, suppose your monthly LTD benefit is $6,000. Social Security approves your disability claim, and you start receiving $2,500 in monthly SSDI benefits. Applying the offset, the insurance company would reduce your monthly LTD payment to $3,500. They would also expect reimbursement from any Social Security backpay you receive.

Please note that Bryant Legal Group does not handle standalone Social Security disability benefit claims. Our practice focuses on complex disability claims involving long-term disability benefits.

Other Disability Benefit Offsets

In addition to SSDI benefits, your disability policy might also include offsets for other disability payments, like workers’ compensation and VA disability.

Personal Injury Settlements and Offsets

Another instance in which you may owe money back to your disability insurer is in the case of personal injury settlements. If your disability is the direct result of an accident that resulted in receiving a settlement, you may be required to pay a portion of your disability back to offset the money earned through that settlement.

How to Avoid Repaying Your Long-Term Disability Benefits

Understand the Terms and Conditions of the Policy

Reading and paying close attention to the details of your policy is crucial. Every insurer and every policy differ, understanding what you can expect from your insurer and what your insurer expects from you can go a long way in avoiding issues down the road.

Keep Accurate Records and Documentation

Staying up-to-date and having the proper documentation regarding payments and other important notices will keep you ahead of your insurer. Make sure to keep any records that pertain to your claim.

Stay in Communication With the Insurance Company

It is not always enough to keep records, going a step further and sharing pertinent information with your insurer can be beneficial. Sharing things like work plans, payment discrepancies, and receiving other benefits in a timely manner are all things that can keep you in the green with your insurance company.

Consult With an Attorney or Financial Advisor

If in doubt, hire an expert. Having someone on your side, especially a trained professional, can ensure you will not miss a thing. Whether it is general concerns, avoiding benefit repayment, or navigating due repayments, an attorney, like one of our experts at Bryant Legal Group, can help you every step of the way.

Bryant Legal Group: Chicago’s Trusted Disability Insurance Firm

With many LTD concerns, awareness is key. Insurers often utilize confusing language and complex policies to keep you in the dark. Luckily, there are a few ways to stay on top of your claim.

If you are considering filing an application for disability insurance benefits, it is a great idea to consult with an experienced long-term disability lawyer early on.

Bryant Legal Group has guided countless disabled individuals through their insurance claims and has a reputation for exceptional service and sophisticated strategies. You can reach us by calling 312-561-3010 or completing this brief online form.