In today’s economy, self-employment — freelancers, professionals, and others — is increasingly common, and as such, there is growing interest in affordable private disability insurance coverage applicable to such individuals. Securing adequate disability insurance coverage is perhaps even more critical for self-employed individuals, as income may be less stable than for a typical employee.
Bryant Legal Group, P.C. attorneys are well-equipped to handle the disability benefits claims and disputes of self-employed individuals. Contact our firm today to speak with a skilled Chicago self-employed disability insurance attorney.
Group and Individual Disability Insurance Differences
Self-employed individuals are often confused as to the differences between group and individual disability insurance plans. There are a number of differences in practical, real-world terms, though there is also substantial variation within each category — as such, no absolute statements apply to all group or individual disability plans.
Commonly seen differences include:
Individual disability insurance coverage tends to be more expensive than group coverage, as a general rule, but individual policies tend to be less strict in their terms (for example, an individual policy may have a looser, own-occupation definition of disability, whereas a group policy may have a stricter, any occupation definition of disability) and more generous in their benefits. Individual disability insurance is also typically underwritten specific to you—your medical history, the type of work you perform, etc… In order to obtain this type of coverage, a blood test or medical examination may be required.
Generally speaking, individual disability insurance plans tend to be more customizable. Various optional riders may be available, such as cost of living adjustment, partial or residual disability benefits, or lifetime benefits. These can give you an opportunity to truly personalize your coverage to suit your particular needs.
Individual insurance coverage is portable — in other words, it is irrelevant whether you continue in your current employment capacity. Your disability insurance coverage will still apply. Group insurance coverage is not portable, by contrast, and will terminate when you end your employment.
Individual Disability Insurance Policies Are Not Governed by ERISA Regulation
The Employee Retirement Income Security Act (ERISA) governs employer-sponsored benefits plans, including disability benefits plans. Disability insurance coverage purchased by self-employed individuals are not governed by ERISA regulation, however. This is not necessarily a bad thing. In fact, though ERISA was originally created with the intent of protecting the rights and interests of policyholders, over time, it has developed into a bulky and complicated regulatory scheme that — in many cases — works against the interests of disability policyholders.
For example, under ERISA, you would not be entitled to bring an action against your insurer for bad faith mishandling of your disability claim. If the insurer unreasonably delayed the processing of your disability benefits claim in the hopes of discouraging you from securing recovery, ERISA would not give you a right of action for bad faith (and thus access to a potential punitive damages award). With individual disability coverage, by contrast, your claims are governed by state law — not federal ERISA regulation — and as such, you are entitled to bring a bad faith action against your insurer, which may lead to significant compensation.
Contact an Experienced Chicago Self-Employed Disability Insurance Attorney for Guidance
Bryant Legal Group, P.C. is a boutique insurance litigation firm with a focus on the provision of comprehensive legal advocacy for policyholders in disputes against their insurers, including those that involve disability benefits. We believe that individualized representation serves as the foundation of effective advocacy, and as such, we work closely with both clients and staff medical experts to develop a clear understanding of the disability at-issue and a winning strategy for moving forward with the insurance dispute.
Call (312) 561-3010 or submit a message through our website to connect to an experienced Chicago self-employed disability insurance lawyer for further assistance with your insurance claims. We look forward to helping you resolve your dispute.