What are my rights if I have a mortgage disability policy to help pay the mortgage in case of disability?

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What are my rights if I have a mortgage disability policy to help pay the mortgage in case of disability?

I am currently on long term disability from Aetna through my work. They told me today during a phone interview that if I receive money from the mortgage policy they may lower how much they pay me. Aetna pays me 60% of my work pay on LTD.I pay premiums for both policies and do not see what one has to do with the other. It does not seem legal to me. It is as if I’m to be punished for have a mortgage policy. How is this legal if at all.

Asked on July 23, 2013 under Insurance Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Insurance policies are contracts: they are governed by their terms. Insurers must pay whatever the terms of the policy(ies) require them to pay--and are allowed to avoid or reduce payments when the terms of the policy(ies) allow them to do so. You need to review the Aetna policy to see when and why they could reduce what they pay you. Ask the Aetna representative to explain the legal justification for the proposed action and point to the terms or language in the policy authorizing it.  If they are violating their obligations under the policy, you could sue them (e.g. for breach of contract) to force them to pay what  they must.


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