Why Am I Not Receiving My Disability Insurance After I Paid Into It?
A disability to a worker is a financially devastating event. Not only will the worker no longer receive income, but she will also have to deal with increased medical bills. Disability insurance is used to protect against this financial loss. Upon becoming disabled, some people will not receive their disability payments. This can occur due to contract design and handling of payments by the insured.
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Waiting Period
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Disability policies are set up with a waiting period before benefits are paid out. During the waiting period of a policy, the insured will not receive benefit payouts. Common waiting periods for a disability policy are 30, 60, 90, 180 and 365 days. The waiting period works like a deductible for a disability policy, as you self-insure for the waiting period. If your disability insurance is still in its waiting period, you will not receive payments until after the agreed amount of time.
Type of Disability
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The definition of disability in your insurance contract can influence benefit payouts. Some contracts use an "own occupation disability." This means you are considered disabled if you can no longer perform your specific job. Other contracts use the stricter "any occupation" definition -- a person must be unable to perform any job to meet the any occupation definition. A dentist who breaks her hand and must take time off would meet the "own occupation" definition, but might not qualify for any occupation disability. The disability definition of your policy may be why you are not receiving benefits.
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Benefit Period
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Disability insurance contracts pay benefits for a specified timeframe. Possible benefit periods last up to a certain age, like 65, or for the insured's lifetime. The longer the benefit period of a contract, the more expensive its monthly premium. Benefit payments are made throughout this specified period. Once a benefit period ends, disability payments will end. You may not be receiving disability payments if your benefit period has ended.
Lapsed Contract
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Disability insurance is provided at the cost of a monthly premium. If an insured does not make his monthly payments, the contract will lapse and the insurance company will not make disability payments. This can occur even if the insured becomes disabled and stops making payments during the contract's waiting period. If you have recently missed premium payments, you may not be receiving disability payments due to a lapsed policy. Contact your insurance company immediately, as you may be able to reinstate your policy by making up missed payments.
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References
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