The answer is likely yes. Though Long-term Disability (LTD) policies vary, most have a provision requiring you to file for Social Security Disability Insurance (SSDI). This requirement is usually tied to continued receipt of your LTD benefits. If you fail to comply in filing a SSDI claim, the insurance carrier can stop your benefit payments.
The reason they do this is because the contract likely contains a provision that allows the LTD carrier to reduce your monthly payments by the amount that you receive from SSDI. In other words, the sooner Social Security is paying you, the sooner they can reduce the amount paid by the carrier. Further, this will also extend to the backpay that you receive from the Social Security Administration. Your contract likely has a provision that requires you to repay them for some of the LTD money that you have received.
All of that said, it may still be in your interest to file for SSDI benefits. Your benefit rate with Social Security is determined based upon how much money you made each year of your working life before you retired or became disabled. The more years that you earn $0, the lower your SSDI rate will become. Additionally, receipt of SSDI also entitles you to Medicare benefits which has a significant value in itself.
Finally, the LTD carrier will try to push you toward using one of their non-attorneys groups to handle your SSDI case. You should be very cautious of this. There is an inherent conflict of interest with these groups. If you lose your SSDI claim, the representatives working for the insurance company will have a ready-made case for the LTD carrier to cease your benefits through them as well. For more on this, see our previous blog on the subject.
If you have a problem with a Long-Term Disability policy or are applying for Social Security Disability, the attorneys of Donati Law can help.
