Understanding Your Policy: Maximum Benefit Period
Your maximum benefit period is one of the most important provisions in your disability insurance policy. Its terms control the period of time during which you are eligible to receive disability benefits under your policy.
Oftentimes the maximum benefit period is more complicated than you may expect. For instance, most newer disability policies contain a benefit schedule that details the length of your benefit period more precisely, based upon your age at the time the claim is filed. This policy from MetLife contains a maximum benefit period schedule similar to those found in many disability insurance policies:
Table A. Maximum Benefit Period Varies By Age When Disability Begins
Age When Disability Begins Maximum Benefit Period
Before Age 61 To Age 65
At Age 61, before Age 62 48 Months
At Age 62, before Age 63 42 Months
At Age 63, before Age 64 36 Months
At Age 64, before Age 65 30 Months
At Age 65, before Age 75 24 Months
At or after Age 75 12 Months
As you can see, under this sort of provision, the maximum benefit period is reduced based upon how old you are when your disability begins.
It is important be aware that all of the relevant information for determining your maximum benefits period is not always located in the same part of your disability insurance policy. For example, your policy summary may contain an asterisk and then, in fine print at the bottom of the schedule state something like “*The Maximum Benefit Period may change due to your age at total disability. Please see Policy Schedule II.” Then, if you notice the fine print and turn to Schedule II, you see something similar to the MetLife schedule, above, that limits the benefit period based upon your age at the onset of disability.
Other disability insurance policies require a bit more calculation. For example, policies like this one from Mutual of Omaha take your Social Security Normal Retirement Age into account:
61 or less: to Age 65 or to Your Social Security Normal Retirement Age, or 3 years and 6 months, whichever is longer
62: to Your Social Security Normal Retirement Age or 3 years and six months, whichever is longer
63: to Your Social Security Normal Retirement Age or 3 years, whichever is longer
64: to Your Social Security Normal Retirement Age or 2 years and 6 months, whichever is longer
65: 2 years
66: 1 year and 9 months
67: 1 year and 6 months
68: 1 year and 3 months
69 or older: 1 year
If your policy contains a provision like this, you can use this calculator to determine your Normal Retirement Age, to determine exactly how long you are entitled to disability benefits.
Finally, it is important to note that many disability insurance policies have specific, limited benefit periods for certain conditions such as mental illness and substance abuse (and typically restrict coverage for these sorts of conditions to a short time frame—usually 1 or 2 years).
As you can see, the maximum benefit provision can take many different forms in a disability insurance policy. It is critical that you read your policy carefully and have a firm grasp on how your maximum benefit period provision affects your eligibility for disability benefits. If you have any questions about your disability insurance policy, contact an experienced disability insurance attorney.