FAQ: Can I Receive Long Term Disability Benefits and Unemployment Benefits at the Same Time?

I’m often asked by prospective clients whether they can obtain unemployment benefits and Long Term Disability (“LTD”) benefits at the same time. My answer is: “It depends on your insurance policy.”

I’ve looked around the web and been shocked by many other answers to this question.  Most say that it would be totally inconsistent for you to claim unemployment while applying for LTD benefits.  I understand the logic as it is often used in my Social Security disability claims.  The logic is this: In order to receive unemployment benefits, you must attest to the unemployment office that you are ready, willing and able to work.  To obtain disability, you must be unable to work.  At first glance, these concepts are completely inconsistent. You cannot tell one agency that you can work but are unable to find a job, and another agency that you cannot work due to a disability.

However, the definition of disability is different in insurance policies than it is with the Social Security Administration.  I said, “It depends” above because you must carefully read the definition of disability under your policy.  Under most policies, the definition of disability (for the first two years of the policy) is the inability to perform the material duties of your own occupation (commonly referred to as “own occ” for your “own occ”upation). This definition is critical.  Social Security generally defines disability as the inability to perform any occupation (commonly referred to as “any occ” for “any occ”upation).  You may find additional information about this on the web when you search for “own occ vs. any occ”.

Why bring up this distinction? Because it relates to the original question.  You may be disabled from working at your own occupation, but able to perform other work – and yet unable to find other work.

Perhaps an example will help clarify things.  Let us assume Sue Smith is orthopedic surgeon.  Dr. Smith performs surgeries all day every day.  However, Dr. Smith begins experiencing tremors in her hands that happen frequently throughout the day.  If she has an “own occ” policy, then she will likely be found disabled for disability benefits because she cannot perform surgeries with her tremors.  However she may be capable of other types of work. With her medical training, although she cannot perform surgeries, she may be able to do an administrative job in a doctor’s office.  However, in a bad economy she may have difficulty finding such a job. No one will hire her, so she files for unemployment. She is eligible for unemployment because she is ready, willing and able to perform work (other than as a surgeon); she just is unable to find work.

In sum, we have found circumstances where a claimant is eligible for both long term disability and unemployment.   In the above situation, the doctor is: (1) disabled from her own occupation and therefore eligible for disability; and (2) able to perform other work, but unable to find work, and therefore eligible for unemployment.

The lesson learned here is that you cannot assume that the general rule will apply to all situations, and that you must carefully read the disability insurance policy.  Because these issues can be complicated, you should consider hiring an experienced disability attorney to assist you in your claim.  Mr. Ortiz has experience in handling long term disability claims. He can be reached at 850-308-7833.

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