How long-term disability insurance can protect visa and green card holders

Colin Lalley 1600


Colin Lalley

Colin Lalley

Associate Content Director, Home & Auto Insurance

Colin Lalley is the associate content director of home and auto insurance at Policygenius, where he leads our property & casualty editorial teams. His insights have been featured in Inc. Magazine, Betterment, Chime, Credit Seasame, Zola, and the Council for Disability Awareness.

Published April 19, 2017 | 4 min read

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Between promised walls, botched travel restrictions, and executive orders, 2017 has really been the year of visas and green cards.

Immigration is a hot button issue, but there’s one aspect that isn’t discussed often: what if you’re in the United States legally and your resident status is more at risk from cancer or a bad back than from ICE?Many people on visas are in the country to work, and their ability to remain in the country and avoid deportation relies on their ability to remain employed. In many cases, no income means no residency. But long-term disability insurance is a little-known safety net that can help workers stay in the country even if they’re unable to work while recovering from a disability.

Disability and residence status

According to the Council for Disability Awareness, one in four workers will become disabled before they retire. If that worker is also a temporary resident in the United States on something like an H-1B, being disabled means more than just missing out on potential income.

"There is no requirement to retain a foreign worker if temporarily disabled," immigration lawyer Ann Badmus of Badmus Law told me via email. "For those with temporary work visas like the H-1B or H-2B visa, the worker can lose legal immigration status if their employment ends for any reason. In that case, if the employer terminates employment because of disability, the worker could be deported if he or she does not leave voluntarily."

If that’s the case, Badmus said, the workers could get in touch with an attorney to see if another pass, like a visitor visa, would be adequate for keeping the worker in the country.

That’s where long-term disability insurance comes in: it can help keep foreign workers in the country.

Lorraine D’Alessio, a managing attorney at D’Alessio Law Group, notes in an email that H-1B visa holders don’t need to necessarily have a steady job to remain in the country, but "at least a steady source of income that does not derive from federal welfare benefits or other forms of government assistance."

A "public charge" is a person who is reliant on government assistance for their financial well being. "The U.S. government prioritizes permanent residency for immigrants who can contribute to the nation’s economy," said D’Alessio, and if a resident becomes unable to work and has to apply for government assistance (like welfare), "could place residency status in jeopardy."

Long-term disability insurance keeps workers from becoming a public charge. Long-term disability insurance works as income protection: it keeps money coming in when someone can’t work. The worker will be able to cover bills without applying for federal assistance, and therefore wouldn’t become a public charge.

If an employer kept a disabled worker on their payroll through disability leave, D’Alessio said that would similarly keep the worker from becoming a public charge. But employer-provided disability insurance is often limited, and a supplemental disability policy can help provide flexibility for visa holders to ensure they can remain in the country even if they can’t work.

How long-term disability insurance carriers handle international policyholders

Disability insurance can help shield disabled workers from deportation. But what if you leave the country voluntarily? Will your policy still pay out the benefit?

One thing that you’ll need to keep in mind is that disability insurance companies may limit how long they’ll pay benefits when the policyholder is outside of the U.S. (and sometimes include Canada and Mexico), typically capping payment terms at 6-12 months. Some carriers may even put in an exclusion during underwriting precluding benefits paid while abroad.

However some carriers, like The Standard, offer some policies that don’t limit payments while the policyholder is abroad. So it’s important to know where a carrier stands before buying a policy—if an applicant is temporarily in the U.S. and may be spending long periods of time in their home country, it could affect their payments.

Most of these restrictions apply to recoverable disabilities only. That’s because insurers want policyholders to be under the supervision of a doctor in the United States to help them recover and get off of the claim. If a policyholder is permanently and totally disabled, the insurer will simply pay the benefit outlined in the policy.

As an alternative, a policyholder might consider a critical illness policy. This will pay out a lump sum of money to cover expenses associated with any condition outlined in the policy, and will allow temporary residents some flexibility in their coverage if their disability policy is limited.The road to U.S. citizenship can be hard, and being unable to work because of disability can make it even harder. Long-term disability insurance can go a long way in providing an extra level of protection for temporary residents, and a disability insurance agent can be almost as important as an immigration lawyer.