CAN MY LONG TERM DISABILITY INSURANCE COMPANY MAKE ME APPLY FOR SOCIAL SECURITY DISABILITY BENEFITS?
Yes. Most long term disability insurance (LTDI) policies contain language that require participants who are receiving LTDI benefits to apply for Social Security Disability Insurance (SSDI) benefits. LTDI companies want you to apply for SSDI benefits because, if you receive SSDI benefits, the insurance company can reduce your monthly LTDI benefits. This provides a clear incentive for the LTDI company and, often, the insurance company will even assist you in applying for these benefits by providing you with free legal counsel.
There are, however, good reasons for you to apply for SSDI benefits. For example, if you receive SSDI benefits, you also have access to Medicare health insurance. Additionally, you may receive benefits for your dependent children. Finally, if your LTDI claim is denied, your continued receipt of SSDI benefits provides good evidence on appeal that you should receive LTDI benefits.
These provisions are legally enforceable. If you fail to apply for SSDI benefits, the insurance company will have the right to reduce your LTDI benefits using your estimated SSDI benefit amount.