What are the different types of disability Insurance Policies?
There are five basic types of disability insurance policies: • Individual Disability Policies — These policies are procured by the insured (or his/her agent), paid for by the insured directly and are not an employee benefit or business expense. Thus, in most cases the disability benefits are not taxable. Benefits can be payable to age 65, beyond age 65 or for life. Should the claim be denied, the insured can either file an appeal of the denial or proceed straight to litigation. • Group Disability Policies — These policies are provided through an employer and often fall under the jurisdiction of the Employee Retirement Income Security Act of 1974 (ERISA). Under ERISA the insured presents the disability claim to the disability plan’s administrator along with evidence of disability. If the plan administrator denies the claim, the insured must first appeal the denial; he or she may not proceed directly to litigation. What most insured’s do not understand is how important it is to present t
