Most Unum policyholders (and other insurance companies) have written in their policies that you must apply for Social Security benefits before receiving long-term benefits. Unum has on its website an FAQ, which in itself is misleading:
Q: How long can payments continue?
A: You can receive benefit payments for as long as your plan considers you disabled or you reach your maximum period of payment, whichever comes first.
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Q: Does workers’ compensation affect benefits?
A: The disability benefit may be reduced if you are receiving income from other insurance policies, retirement or government programs.
Read your policy carefully as it may have a provision requiring you to apply for benefits that you might otherwise be entitled to, including Social Security. It is in your best interest to apply because if you do qualify, chances are the government isn’t going to deny you. Unum, on the other hand, is notorious for bad faith practices and is always watching its bottom line. Denial is the name of the game.
Before Jake received his first long-term disability (LTD) benefit check, Unum required that he apply for Social Security Disability Insurance (SSDI) benefits, which he did. Next up, he received a letter from Unum stating that any benefits from other sources would be subtracted from his monthly LTD checks. By signing Unum’s Reimbursement Agreement, Jake agreed to “reimburse Unum any such overpayment within thirty (30) days of his receipt of such funds.”
You can’t hide from Unum. Jake did qualify for SSDI benefits and after two years collecting Unum’s LTD, he received about $10,000 from Social Security. For many people, receiving a check in the mail is hard to give up, especially to the largest disability insurance provider in the US. Jake didn’t report the check to Unum, but they found out anyway. And they held a portion of his monthly LTD benefit to recoup the overpayment.
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Bob, on the other hand, said that his Social Security representative advised him not to pay Unum’s overpayment. According to Bob, his rep said that Unum is notorious for taking any overpayment and then terminating your policy. Bob said that Unum did indeed cancel his policy after he received back pay from Social Security. Bob didn’t say whether the insurer recouped the overpayment but if not, Unum would likely have its day in court.