Question
What is the name of your state?
Pennsylvania
My question is - is my long term disability insurance company entitled to any or all of my retirement money? I received paperwork today for my six month review. They are questioning if I have received retirement money. I have received a lump sum, not a large amount, under $25,000. I used part of it to pay down some debt so I would be able to live on the reduced monthly income. The rest of the money has been put into savings for emergencies. I had no idea they would be entitled to any more money. I have qualified for SS disability and they (long term) have reduced my monthly amount by the SS amount. I also had to pay back Long Term for two months worth of SS disability. I'm beginning to wonder if LTD is worth the money spent!
Thank you
Answer
Well, it depends . . .
You need to look at your LTD contract. Read the section on offsets & coordination with other coverage. If your retirement distribution was because of disability, and your LTD coverage coordinates with other disability payouts, then there may be another adjustment.
The SS offset is not unusual. Every LTD contract I have seen offsets SS.
The time to understand your LTD benefits is when you buy them. Cheap policies rarely pay off. That's why they are cheap.