What is the difference between individual and group long-term disability insurance in California?

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Frank N. Darras - Insurance Coverage - Super Lawyers

Answered by: Frank N. Darras

Located in Ontario, CADarrasLaw

Ontario, CA
Phone: 877-816-1732
Fax: 909-974-2121

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Individual and group long-term disability insurance policies both provide valuable income protection to workers, but they differ in premium costs, taxability of benefits and portability of coverage.

Most importantly, these differences can also affect how you pursue your claim for benefits and how likely it is you will be approved.

Group disability insurance policies are provided through an employer or professional organization at a more affordable cost than individual disability insurance. These policies also provide basic coverage with a more limited definition of disability than individual policies do.

Most group long-term disability insurance policies – like those provided by nongovernment, private employers – are governed by a federal law called the Employee Retirement Income Security Act (ERISA).

While it was initially intended to protect employees, ERISA establishes strict rules for filing and appealing disability claims, and it sets many requirements for deadlines and submissions. 

If you are insured under an ERISA disability insurance plan, ERISA generally requires that you appeal a denial, in writing, typically within 180 days of the denial. Failing to appeal can negatively affect your ability to file an ERISA federal lawsuit later. Therefore, it is essential to hire experienced ERISA lawyers in California who can help you meet ERISA’s many requirements and strict deadlines.

Individual disability insurance policies are not governed by ERISA, but instead fall under state law. These plans are often more expensive and offer more comprehensive coverage than group disability insurance.

Individual disability claims are also handled differently. Claimants can sue in state court for negligence, bad faith and breach of contract without having to exhaust the administrative remedies that ERISA disability claimants do.

Filing a claim for benefits can be challenging regardless of whether you have an individual or group long-term disability insurance policy. There are many deadlines and requirements to meet at all stages of the process, and a simple misstep can lead to a denial.

DarrasLaw’s top-rated long-term disability insurance lawyers can assist you at any stage of your individual or group disability claim. The firm’s century of collective ERISA, individual disability and insurance litigation experience has yielded unparalleled results for clients in California.

Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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