Lawyers and Their Disability Policies | Florida Disability Insurance Lawyers | Tampa Bay Long Term Disability and ERISA Lawyer

Lawyers are not very good at protecting themselves and their families from financial disaster because we are too busy practicing law.

This is a good time to stop for a moment and purchase a disability policy to protect yourself from financial disaster if you became disabled from practicing law. If you have a long term disability policy, I would suggest you get it out and read it!

It is important that lawyers understand their long-term disability policies so they can prevent the disaster of being disabled and becoming unable to recover the benefits they deserve. Yes, that does happen and I have seen it happen all too often.

Let’s start at the beginning. Did you know that there are three types of disability policies?  Do you know which kind you have?

The first is an individual disability policy, which you may have purchased directly from a carrier and which provides you with long-term disability benefits in the event of sickness or injury.

Do you know that there are two types of individual policies?  The first is a general policy that insures you against being disabled and being unable to perform all work, which an “occupational” policy  that provides you disability benefits if you can’t perform the material and substantial duties of your own occupation.

How is “occupation” defined in your policy? Is it your practice area or a niched practice area? Is “occupation” defined as the way you practice law in your geographic area or is it the Dictionary of Occupational Titles definition of lawyer? That can make a big difference in your entitlement to disability benefits!

Obviously, an occupational policy will provide greater coverage to a lawyer who would be entitled to  disability benefits even if they were able to engage in another occupation.

The second type of long-term disability policy is a group policy which is made payable to the participants of professional associations or a legal practice. Group policies provide benefits based on a percentage of your base salary.  These benefits normally pay 50-75 percent of the base salary and limit the maximum amount of benefits you are entitled to per month, regardless of your base income. It is not uncommon for these group policies to reduce benefits when you receive income from other sources such as Social Security Disability, Workers’ Compensation, or even a 401K distribution.

Employer sponsored disability policies are typically the least expensive policies and provide employees with disability insurance based on a percentage of the base salary as part of the employer’s overall benefit package. What does your policy say about base earnings? Obviously, the timing of your disability can be key to how much you get in disability benefits, particularly if you have a residual claim for a partial disability.

Unfortunately, group and employer sponsored policies are governed by the Employer Retirement Income Security Act of 1974 (ERISA). There are NO jury trials or punitive damages under ERISA, which  also significantly affects your administrative and litigation rights. You can destroy your disability claim in the claims process and never have the opportunity to “fix’ those mistakes at trial!

The most a disabled lawyer can recover in an ERISA lawsuit is the amount of the benefits due, the interest cost and a discretionary award of fees.

Unfortunately, when disability policies are sold to law firms, one of the primary factors is in tax savings and not coverage. Unfortunately, most law firms will opt for the least expensive policy that is taxable rather than for expanded coverage.

ERISA policies have a number of disadvantages. First, you have an administrative appeal before you can sue.  If the plan provides the administrator with the discretion to determine the claim, courts generally overturn that decision if the administrator has acted arbitrarily and capriciously. But if the claims file reflects a rational basis for the decision despite overwhelming evidence, the federal court will uphold the decision.

Unfortunately, the federal court is limited to reviewing the evidence that was in the file at the time the administrator made the decision. As a result, you can’t offer additional documentation, have your doctor testify, and you won’t even testify in front of the federal judge. Discovery is limited. Most long term disability claims are resolved at mediation or by Motion For Summary Judgment.

Despite these disadvantages, your long term disability claim can be won. However, not just any lawyer can handle a long term disability claim as it is highly specialized – just like your practice area. It is important that you consult with a long term disability/ERISA attorney before filing a claim so that you understand the definition of disability, what is covered under base earnings so you can get your medical and financial house in order, and developing supporting medical evidence before you file your claim for disability benefits.

It is also important that you learn how to fill out Activity of Daily Living Forms and how to deal with visits by disability investigators.

Disability insurance companies do target high-end policies issued to lawyers for denial or termination with the hope that ERISA will limit their exposure.

Don’t make yourself a target for claims denial. Contact the law office of Cavey & Barrett to assist you in reviewing your disability policy, to assist you in your pre-claim filing preparation, and to assist you in reversing denials of disability claims.

Nancy Cavey, Florida based disability lawyer, has written a free book “Robbed of Your Peace of Mind” which outlines the policy terms you don’t want to see in your disability policy and the mistakes that you can make that will destroy your claim.

If you have any questions, please give us a call at 727.894.3188 or contact us online by clicking here.

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