Since I am on the issue of life insurance coverage (see my
other blog post of today’s date), I take this opportunity to remind all readers
of a little known provision likely found in your employer-provided, group life
insurance policy --- commonly referred to as “life waiver of premium”
(“LWOP”). I have yet to review a group
life insurance policy which does not contain a waiver of premium
provision. This provision provides the
employee with the right to continue with this life insurance coverage under the
group policy if the employee has become “disabled.” Such coverage will continue so long as this
person continues to meet the definition of disability (as contained within the
life insurance policy and not the definition found in an accompanying long term
disability policy) and even if the employee is no longer employed with that
employer. In order to be “disabled”
under the life insurance policy’s waiver of premium provision, one typically must
prove the inability to perform the material and substantial duties of “any
occupation.” Whereas, the typical group
long term disability policy contains a definition of disability, at least for
the first 24 months of the claim, that only requires the participant to prove
the inability to perform the material and substantial duties of their “own” or
“regular” occupation. This can be
significant but not such a huge difference that an individual should not seek
continued coverage under life insurance policy.
How to File an LWOP Claim
In order to obtain ongoing life insurance coverage under the
waiver of premium provision, most employers or insurance companies will require
that you submit a separate claim under the life insurance policy, specifically
claiming ongoing coverage under the LWOP provision.
Deadlines
There are deadlines for filing an LWOP claim. Consult your policy. These deadlines may be as short as 30 days or
up to one year or greater. Each policy
is different.
When I meet with potential new clients who have suffered a
denial of their claim for long term disability benefits, greater than 95% (or
higher) of them will have no idea that their life insurance coverage can
continue under the LWOP provision. Check
your life policy; know and pursue your rights.
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