Why is the any Reducing My Insurance CompMonthly Benefits? Understanding Offsets

woman holding receipt, using laptop, calculating bills, money, sitting at table on couchWhen you rely on long term disability insurance benefits, noticing a reduction in your monthly payments can be both surprising and distressing. At Todd Krauss, APC, a key focus is helping clients understand and address such changes, especially those covered under the Employee Retirement Income Security Act (ERISA). This insight can provide clarity on why your insurer might be lowering the benefits you depend on.

What Are Offsets?

Offsets are provisions in disability insurance policies that allow the insurance company to reduce your monthly benefit amount by the amount you receive from other sources of income. These sources can include Social Security Disability Insurance (SSDI), state disability benefits, workers’ compensation, and pension benefits. 

The purpose of offsets is to prevent you from receiving more income than you earned before your disability. Insurance offsets occur when your insurance provider deducts specific amounts from your benefit payments, which are often due to these income sources you may be receiving.  These offsets can also lead to an overpayment issue which means the insurance company will be asking for money back from you. 

Understanding Your Specific Policy

The details of how offsets work will vary depending on your specific disability insurance policy. It’s crucial to carefully review your policy documents to understand:

  • Types of income considered as offsets: Some policies may only offset government benefits, while others may include private income sources like pensions.
  • Calculation methods: Policies outline how the insurance company calculates the offset amount. This may involve a simple subtraction of the other income source from your disability benefit or a more complex formula.
  • Minimum benefit provisions: Some policies include a minimum benefit amount you will receive regardless of offsets.

Common Reasons for Offsets in Disability Claims

Disability insurance benefits can be reduced by offsets from other income sources. Understanding these offsets is crucial for accurately calculating your potential disability income. If you’re concerned about a reduction in your disability benefits, consulting with a California disability denial claims attorney can help you protect your rights.

  • Receipt of Other Disability Benefits: Many insurance plans are designed to integrate with other disability benefits, reducing their payout amount by what you receive elsewhere.
  • Settlements from Lawsuits: If you receive a settlement from a personal injury claim, workers compensation lawsuit or other legal actions related to your disability, your insurer may offset these amounts against your monthly benefits.
  • Pension Payments: Receiving a pension can also trigger offsets, particularly if those pension benefits are related to your previous employment, from which you are now disabled.
  • Social Security Adjustments: When initially applied for, your disability benefits might be calculated before Social Security benefits are finalized. Once SSDI payments begin, insurers adjust the monthly benefit to reflect this additional income.

When to Seek Legal Help

If your disability insurance company reduces your benefits due to offsets, it’s important to understand if the reduction is valid. Here are some situations where you may want to consider seeking legal assistance from a California disability denial claims lawyer:

  • The insurance company miscalculated the offset amount.
  • The offset provision in your policy is unclear or ambiguous.
  • You have been denied benefits altogether.

Secure Your Rights with Todd Krauss, APC

Insurance companies often operate within their contractual rights when applying offsets, but errors can occur. Whether these deductions are justified can sometimes be a matter of complex legal evaluation. At Todd Krauss, APC, our commitment is to ensure that your rights are vigorously defended so that you receive every dollar of the benefits you deserve. Reach out to us and let our seasoned attorney provide the support and advocacy you need. Don’t hesitate to contact us today for a free consultation to discuss your specific situation.

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