How to Avoid Getting Screwed Over if Your Employer Offers Disability Insurance

Art: Robin Mead

Some employers offer disability insurance. This is often called Long Term Disability or LTD. If your employer offers LTD, you are lucky. Very lucky. Many disabled people wish they were you right now. Of course, you do not want to do anything to unintentionally sabotage your good fortune.

If you are still working now, and you are dealing with chronic illness, or you think there is any chance at all you may someday need LTD, there are things you can do to protect yourself. Here’s some common LTD regrets:

Quitting Your Job

Some insurance companies will make it more difficult (or impossible) to apply if you quit your job before applying. Many of our readers report that started by applying for short term disability, and then applied for long term disability before the short term had ended. Other people took sick days or FMLA and while they were out, applied for short term disability and then long term disability. Resignations: A Disability Claim No-No

Losing the Opportunity to Get LTD

Some people walk away from the opportunity to get LTD. They decide to switch to another job without benefits. Or become self-employed. Or reduce their hours so much they lose job benefits. Or not pay for LTD insurance if it is offered at an extra cost. All we can say is: If you are chronically ill, OH MY GOD DON’T DO THIS.

Losing the Opportunity to Get STD

STD is Short Term Disability. It can offer you pay while you are waiting for your LTD decision. Most LTD policies do not pay for the first four or five months, so if you have the opportunity to qualify for STD, it is usually wise to do this. Some employers offer LTD and STD at an additional cost. If you have chronic illness, please think carefully before turning down this opportunity.

Assuming You Can Apply for Social Security Instead

Some people think they don’t need to LTD, because they can always just apply for Social Security. Not so. Social Security disability commonly takes three years before you see your first disability check. If you are able to apply for LTD, you may be able to have income to live on that entire time. For some people, getting both LTD and Social Security will also mean higher income.

Trusting Your Employer 

The people who work at Human Resources are hired to protect your employer, not you. The people who work at your employer’s disability insurance company are hired to save the insurance company money, not to help you get your needs met. They may be perfectly nice people, but they still have to do their job, and their job is to protect their employer.

Stories from readers who listened to their employer and lived to regret it: Human Resources is Not Your Friend

Giving Up on LTD

Amy was told she should give up on LTD and just apply for Social Security. She was kind enough to share her story to help others: Amy Regrets Listening to Her Lawyer About SSDI & LTD

Changing Work Tasks

Some LTD policies require that you prove you cannot work at your current job. Other policies require you prove you can’t work at any job in the country. Many policies start one way, and then switch to the other way after a few years. Check your policy. If you are going to want to prove that you can’t work at your current job, it may cause issues if your current job changes to be something easier or more sedentary.

Reducing Your Hours

One common regret people have is switching to part time hours with lower pay. LTD is based on your last month of pay. Lowering your pay can lower your disability check every month for the rest of your life. In some cases, switching to part time work can completely disqualify you from being eligible for disability insurance, if your employer does not offer this benefit to part time employees. There are two exceptions to this rule. To learn more about the exceptions, take a look at Rose’s story: Rose Reduces Her Work Hours Without Reducing Her LTD

Not Reading Your Contract

If you apply for LTD without reading your contract, you may be in for some surprises down the road. Unhappy surprises.

Buying Pre-tax LTD 

Check to see if your employer can allow you the option to purchase your LTD post-tax. Your employer may not be aware this is possible. You may need to contact the insurance company and work with your Human Resources department. Real Life Example: John opted to pay an extra $7 per month to cover the taxes. Eventually, he became disabled and received an extra $250 every month.

Making Bad Decisions at The Doctor’s Office

The decisions you make, and the things you say, and the things you do right now may turn out to have a big impact on you later. How to Go to the Doctor Without Regret

Making Bad Decisions in The Rest of Life

Big regrets reported by our readers: 10 Biggest Life Regrets

Tools For Troublemakers

If There is Any Chance You Will Ever Apply for Disability…

Sample Letter for Requesting a Disability Accommodation in the Workplace

How to Protect Yourself While Applying for Long Term Disability

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Thanks for Reading

🌸 This page is part of the free online guide: The Sleepy Girl Guide to Social Security Disability 

🌸 Art on this page by Robin Mead and Elizabeth D’Angelo.

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