Why are my benefits less than what I paid for or was entitled to receive?

In almost all long-term disability insurance policies received through employment, the insurance company is allowed to offset (or deduct) amounts you receive through other means for your disability. This deduction is dependent on the specific language of the policy but is usually a dollar-for-dollar deduction of other benefits such as social security disability, worker’s compensation payments, other long-term disability benefits, disability retirement payments, and a litany of other payments you may receive.

For example, if your gross income is $2,500 per month and your long-term disability provides for 60% of your gross if you become disabled, your LTD payment should be $1,500. However, if you receive social security disability (SSDI) benefits in the amount of $850 per month, your long-term disability payment will be reduced to $650 per month($1,500 minus $850). You will not receive $2,350 ($1,500 plus $850).

In some instances, the amount you receive for these other benefits (including SSDI) will reduce your long-term disability monthly pay significantly and may result in you receiving only the minimum payable under the policy (usually somewhere between $25 and $200 per month).

For this reason, it is important to read your long-term disability policy and get a firm grasp on the total amount of money you will be receiving from all sources. 

Loyd J. Bourgeois
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Disability, Personal Injury, and Divorce Attorney