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Question

Can Unum deduct any SSDI I receive? If so, why?

Asked on September 16th 2013 by James K.
How can they take money saying this is a policy to cover 70% of your pay if Your disabled? Then deducted any SSDI you get. Our Unum policy is for 50% of our pay if LTD I paid extra to bump it up to 70% only to find out they are cutting it because of SSDI. Why should the government have to pay for what they sold me? The Unum rep told me if they let us keep the 70% policy and the SSDI no one would go back to work.

Answer

Answered on September 17th 2013 by Attorney Stephen Jessup

James, Unfortunately the Social Security offset is perfectly legal, and is a bargained for term in the policy and is standard in just about every employer provided group disability policy. The only way to avoid Social Security offsets would be to purchase a private individual policy from an Agent. That being said, with that you pay much higher premiums than what you do (if at all) through an employer provided group plan. It’s the same concept as buying a base model car (ERISA governed policy) versus one with all available options (Individual policy) – you get what you pay for. At the end of the day you end up making 70% of your prior earnings, it’s just a matter of who pens the check – Unum or Social Security. The disability insurance industry is set in a way to prevent an insured from collecting more money on disability than if they were workings, because, as the Unum rep bluntly put it, no one would go back to work if they could potentially make more money not working.

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