LTD policies are a great way to protect your income should you become unable to do your job. But most people probably know little about the ins and outs of their LTD policy. In addition to representing you through the SSDI process, Allsup can guide you through how SSDI and LTD work together.
As outlined in their policies, LTD carriers typically “offset” for your Social Security Disability benefit. This usually means reducing the LTD benefit dollar-for-dollar by the amount of any SSDI benefits received. You don’t “lose” any income; it’s just that the same amount is now coming from two sources – your LTD benefit and your SSDI income.
Example: You receive $3,000 per month in LTD benefits and are later awarded $1,000 per month in SSDI benefits. Your LTD benefit will be reduced to $2,000 per month, and you will receive $1,000 from SSDI. That’s a total of $3,000.
What happens if you are awarded a retroactive SSDI benefit that is paid to you in a lump sum? This could create what the insurance company calls an “overpayment.” If you were receiving LTD benefits throughout the SSDI application process and then are awarded SSDI benefits, the LTD offset applies for that time period as well.
As part of its SSDI representation service to those covered by LTD insurance, Allsup will assist you in understanding and returning any overpayment due back to your LTD company. Your decision not to meet the repayment requirement could result in your LTD benefits being suspended by your insurance carrier. Assisting you in returning the overpayment to the LTD company is one way that Allsup can help you protect your monthly LTD income, and the large majority of our customers ask Allsup to do this for them.
*Information Allsup.com provides regarding LTD benefits is general in nature. Your particular LTD policy may be different. Please contact your LTD benefit administrator if you have specific questions regarding your LTD claim or benefits.