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Actual Sample Disability Case A woman bought long-term disability insurance. She was injured, had multiple surgeries, and was unable to work. She applied for long-term disability benefits. The insurance company did not investigate but denied the claim. The woman sued and was awarded $27,000 in benefits, $100,000 for emotional distress, and $16,500,000 in punitive damages. Ace v. Aetna Insurance Company, U.S. District Court, Alaska, May 1996. Policy TermsDisability insurance pays benefits to an insured wage earner who cannot do his normal job because of illness, sickness, or injury. Disability
What constitutes "disability" varies. Some policies require inability to work in any job. Others define it as an inability to perform the duties of your particular occupation. Some policies pay for partial disability.Benefits
Many policies pay an amount that will bring the insured's total income to 50% to 80% of his earnings before the illness, sickness, or injury.
How Long Benefits Will Be Paid
This varies. Some policies will pay one or two years but then the insured must be retrained for other work. Some policies pay to age 65; others will pay as long as the insured lives.Waiting Period
Some policies won't pay until the disability has continued for a certain length of time. The waiting period begins on the first day of disability.Doctor's Care
The insurance company will probably have a doctor monitor the insured's health and report any changes which may affect coverage.Residual Disability
Some policies pay the unused portion of the total disability period, limited to age 65.
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