Long-Term Disability Insurance (LTD)

Long-term disability insurance pays a share of your income, often around 60 percent, if a medical condition keeps you from working for months or years. Benefits usually start after a waiting period, commonly 90 or 180 days, and can last for a set number of years or until retirement age. Many policies pay for an initial period if you cannot do your own job, then continue only if you cannot do any job you are reasonably suited for.

Most people get LTD through work, which means the plan is usually governed by ERISA, the Employee Retirement Income Security Act. ERISA sets the claims process. Under the Labor Department's claims rule, 29 C.F.R. 2560.503-1, a disability plan must give claimants at least 180 days after a denial to file an internal appeal. That appeal is critical, because in most ERISA cases a court later reviews only the record created during the claim and appeal, so evidence you do not submit then may never be considered.

If the appeal fails, the claimant can sue under ERISA section 502(a)(1)(B) to recover benefits due under the plan. These are usually individual lawsuits, and remedies are limited: there is typically no jury and no punitive damages. Class actions arise when an insurer is accused of a systemwide practice, such as improperly offsetting benefits or using biased reviewers.

If your claim was denied, request your full claim file, get detailed statements from your doctors, and calendar the appeal deadline right away. Our page on long-term disability denial lawsuits explains when a denial may be challenged, and the Social Security disability entry covers the separate government program.