When an employee becomes disabled and can no longer work, navigating the complexities of long-term disability (LTD) and life insurance benefits can become overwhelming. For many people, life insurance provides financial security for their loved ones, too, so the importance of getting its benefits cannot be overstated.
Unfortunately, disabled workers often lose their life insurance coverage due to miscommunication between employers and insurance companies or technical lapses in the payment of premiums. The ERISA Waiver of Life Premiums (WOLP) provision was designed to prevent this from happening, but it is frequently mishandled.
At Dabdoub Law Firm, we have successfully fought to secure life insurance benefits for disabled workers by holding insurance companies and employers accountable. With our experience and focus on disability and life insurance claims, we know how to win these complex cases, even when insurers attempt to deny benefits due to technicalities.
What are ERISA Waiver of Life Premiums (WOLP)?
The Employee Retirement Income Security Act (ERISA) governs most employer-sponsored life and disability insurance policies in the United States. Many group life insurance policies include a Waiver of Life Premiums (WOLP) provision. This waiver ensures that employees who become disabled and can no longer work do not have to pay premiums to maintain their life insurance coverage.
Typically, WOLP becomes active after a waiting period, often around 180 days from the onset of the disability. During this time, employers and insurance companies must communicate effectively to keep the employee’s life insurance policy active. Once WOLP is applied, premiums are waived, and the employee’s life insurance continues as if they were still working.
However, when employers or insurance companies mishandle the process, disabled workers may lose coverage unknowingly, which can leave their families without the life insurance benefits they believed were secured.
Importance of WOLP for Disabled Employees
Life insurance is often a safety net for disabled employees and their families. It provides financial protection in the event of a worker’s death, especially when the worker is no longer able to earn an income. WOLP enables this protection to continue without the burden of paying premiums during periods of disability.
Unfortunately, several issues can arise during the WOLP process:
- Miscommunication between employers and insurers: Employers may stop forwarding premium payments once an employee goes on long-term disability, mistakenly assuming the coverage is no longer needed, which may lead to lapses in the policy before WOLP takes effect.
- Lack of awareness of WOLP: Disabled employees may not know they are entitled to a waiver of premiums and may unknowingly let their life insurance lapse.
- Failure to apply for WOLP benefits: Insurance companies may fail to approve the waiver or process the necessary paperwork, leaving employees without coverage.
These missteps can have devastating consequences, especially if an employee dies while their life insurance coverage has lapsed. In such cases, the insurance company may deny the claim, citing non-payment of premiums.
Challenges Disabled Employees Face in Maintaining Life Insurance Coverage
The time between the onset of a disability and the approval of WOLP is particularly vulnerable. Disabled employees often lack the financial means to pay premiums during this period. It is the responsibility of the employer to ensure that the employee’s life insurance remains active, and the insurance company’s responsibility to process the WOLP when the employee becomes eligible.
When communication breaks down, employees can lose their life insurance coverage without even knowing it. If the employee passes away during this time, the family may face a denied life insurance claim due to the policy's lapse.
Case Study: Illinois Liver Transplant Surgeon’s Fight for Disability & Life Insurance Benefits
One notable case that we handled involves an Illinois liver transplant surgeon whose career was cut short by a wrist injury. This injury left him unable to work, making him dependent on long-term disability (LTD) benefits and life insurance for financial stability.
Although his LTD benefits were secured, his life insurance policy was at risk of lapsing before WOLP could take effect. Dabdoub Law Firm stepped in and successfully argued that both the employer and the insurance company were responsible for keeping the surgeon’s life insurance active during the waiting period. By securing the WOLP benefits, we ensured that his life insurance remained in place, safeguarding his family’s financial future.
This case highlights our firm’s expertise in ERISA law and demonstrates how we have won tough cases for our clients, even when insurance companies fail to uphold their responsibilities.
Another Victory: Reversing a Denial of Life Insurance Benefits in the United States Court of Appeals
In another case, Dabdoub Law Firm successfully helped a client whose life insurance claim was denied after his spouse passed away. The employer had failed to forward premium payments to the insurance company, resulting in a lapse of the policy. Initially, the claim for equitable relief was denied by the district court, but our attorneys appealed the case to the United States Court of Appeals, which reversed the lower court’s decision. This allowed the client to pursue his claim and recover the life insurance benefits he deserved.
Our success in federal court showcases our firm’s commitment to securing benefits for our clients, no matter how difficult or complex the case may be.
Why You Need Experienced ERISA Attorneys for WOLP Cases
Navigating the complexities of ERISA and Waiver of Life Premiums (WOLP) provisions requires a thorough understanding of insurance law and the tactics insurance companies use to deny claims. Dabdoub Law Firm has the resources and experience needed to fight for disabled workers and their families nationwide. With a proven track record of winning cases against major insurance companies, we know how to take these cases to court and demand maximum value for our clients. If you or a loved one is facing a life insurance denial due to mishandled WOLP benefits, we are here to help.
Contact us today by calling (800) 969-0488 to request a free case review. We are ready to help you pursue the benefits you deserve. Remember: We can help ERISA clients in all 50 states.