The ins and outs of disability insurance can sometimes be confusing leading to the question do you have to pay back disability insurance? Yes, there are very specific cases when you have to pay back disability insurance, but if the specific cases do not apply to you, you do not have to worry about it.
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The specific cases are fraud, benefits collected after death, and when private and social security disability benefits overlap. The following article will give additional information about disability insurance and the specific cases that require pay back.
Cases Requiring Pay Back of Disability Insurance Benefits
As stated above, you only have to pay back disability insurance benefits in very specific cases. The first case is fraud. Penalties for disability fraud can be severe. Fraud is any attempt to collect disability benefits under false circumstances. This includes knowingly or unknowingly providing false information on an application. The false information can include, but is not limited to:
- Lying about your family income
- Lying about your disability
- Providing false or altered documents about your personal history, medical information, and finances
- Continuing to collect benefits while no longer disabled
Benefits after death- In addition to fraud, another reason you have to pay back disability benefits is if benefits are collected after death. This can be intentional or just a lapse in the timing of paperwork. For example, some people delay informing the government or the private insurance company about the death of the individual receiving benefits in order to collect a few more checks. Other people report the death right away, but because the system takes some time to register new information, a check is mailed. In both of these circumstances, you need to pay all benefits back from the day of death.
Overlap- The third specific case that requires the pay back of disability insurance benefits is the overlap of government and private disability benefits. Private disability insurance is meant to make up the lack that is sometimes found in Social Security disability benefits.
This means that if the total amount of your private disability benefits and Social Security disability benefits exceed the legal limit, you must pay the difference back to your private insurance carrier. It is up to you to track and report overlaps as soon as they happen to avoid the penalties associated with overlapping benefits.
Social Security and Private Disability Benefits
Social Security disability benefits are available to anyone who has a medically proven disability and has paid into social security through being a part of the work force. The only exception to this is individuals who were born with a disability or individuals who received their disability during childhood or adolescence. Once a disability is medically proven, an individual can apply for social security disability benefits. Approval is based on need, income, and the level of disability, mainly, is it temporary or permanent.
Social Security disability benefits don’t always cover all expenses and often leave individuals without a lot of financial options. This is where private disability insurance comes into play. Unlike Social Security disability benefits, private disability insurance must be purchased before a disability occurs.
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Therefore, it is meant to cover an unexpected disability, usually through an accident or a debilitating disease. Private disability insurance can often make up for the lack found in Social Security disability insurance, but there are legal limits that dictate how much you can receive.
Finding Private Disability Insurance
A good private disability insurance company will know the ins and outs of disability insurance. A good company will know the legal limits as well as the amount of coverage you would need if you were to become disabled. These providers are able to answer any questions you have and allow you to change your insurance policy and benefits as needed to coordinate with age and changing income levels. Be sure to have in mind what you are looking for in your coverage before contacting companies so you can see if they are a good fit for you.
Finding private disability insurance before it is needed is important. When looking for a disability insurance company, a great way to find an affordable deal is to shop online using an online comparison tool. This allows you to put all your information into one spot and receive several rates and quotes from top companies. These rates and quotes can then help you make the right decision. Comparing prices is still the best way to save on just about anything including disability insurance.
Try the online comparison tool by typing in your zip code and comparing disability insurance quotes today!