Can My Insurance Demand Disability Payments Be Returned?

When you are unable to work as a result of a disability, you may be eligible for disability insurance from both private companies and the Social Security Administration. Disability can cover a period of time as short as a few months to an entire lifetime. Benefits vary from short term to long term but the sources and contract requirements are similar.

Most recipients of disability are third party beneficiaries and the terms of their disability benefits are often hard to access. As a result, when their insurance company contacts them requesting repayment of benefits received, the news can often come as a surprise. Requesting a copy of the insurance contract for your disability insurance can help you avoid unexpected repayment demands.

Under What Circumstances Is Repayment Necessary?

There are three standard cases in which the benefit recipient is required to repay disability insurance. Your or your attorney can consult your disability insurance contract for the specifics of your particular insurance plan.

Lump Sum Social Security Benefit Payment

Recipients of long-term disability insurance benefits are most often required to repay disability benefits. During the term of disability, the Social Security Administration may make a lump sum payment to you for your disability. Should this happen, your disability insurance provider can require that you repay the benefits provided to you during your disability.

Overpayment of Disability Benefits

In the case of overpayment of benefits, the recipient of the disability benefits is still responsible for repayment to the provider. When the insurance company makes an erroneous overpayment, an attorney can often negotiate a lower repayment amount or a longer repayment period for the recipient of the disability benefits.

Overlap of Multiple Disability Insurance Benefits

When Social Security benefits and disability insurance overlap, the recipient of the benefits will be required to repay all insurance paid outside of the Social Security benefits. Worker’s Compensation benefits are generally excluded from the list of overlapping disability insurance benefits. The individual disability insurance contract will specify which benefits cannot overlap.

Don’t Pay More Than You Owe. A Lawyer Can Help.

When you are faced with repayment of your disability benefits, always consult your disability lawyer. As you begin to decipher the complexities of disability insurance contracts, your attorney can interpret, explain, and clarify every detail. Additionally, an attorney can contact your disability insurance provider if you are unable to succeed.