Frequently Asked Questions

What are Offsets?

Frank Darras, America’s Top Disability Lawyer, discusses how disability insurance policy payouts are commonly offset by state disability insurance benefits, workers’ comp, Social Security Disability or a third-party recovery.

Frank Darras:

“Other income benefits are an offset to your monthly disability benefit. For example, you make $4,000 a month. Your policy protects you for 60% of that, or $2,400 a month. Let’s say you got injured on the job, and you get Workers’ Comp benefits of $2,400 a month. Will my long term disability policy pay me anything? No. $2,400 I get from Workers’ Comp offsets dollar for dollar from the $2,400 my long term disability policy was supposed to pay. I get a $0 benefit.”

“What if I get Social Security? If your Social Security benefit is $2,400 a month, and your monthly disability benefit’s $2,400, you get $0.”

“What if I live in a state where we get State Disability Insurance. Will it offset dollar for dollar? Yes. Really important when you’re evaluating this disability policy you either bought individually or you got from work, to look at the offsets. Typical State Disability Insurance, Workers’ Comp, Social Security, or a third party offset.”

“You get injured in a car accident, you collect from the person who caused you harm. Whatever you collected, less the attorney fees, is an offset, dollar for dollar. So it’s not surprising to see a $4,000 or $5,000 wage earner a month getting zero benefits from a long term disability policy. Be careful.”