Long-term disability insurance is a financial product designed to protect you against unforeseen illness or injury that impairs your ability to work. Long-term disability insurance can be purchased by an individual through an insurance company, or as part of a group policy through your employer. If you have filed a claim with your disability insurer and your claim has been delayed, denied, or you’ve received an unfavorable decision, our Columbia insurance lawyers may be able to assist you to take action to get the benefits that you have paid for and the compensation to which you are entitled.
Unfair Treatment by Your Insurance Companies
When you purchase long term disability insurance to protect you and your family’s financial future in case you become ill or injured and unable to work, you expect the insurance company to keep its end of the bargain. In exchange for diligently making your premium payments, you expect the insurer to pay the benefits to which you are entitled if you develop an illness or injury that leaves you unable to work.
These benefits that you’ve paid for are necessary to insure you and your family’s security. At the time when you suffered the injury or illness, you are at your most vulnerable. Unfortunately, as you may have discovered, insurance companies do not always hold up their end of the bargain. Sometimes insurance companies may have legitimate reasons for refusing to pay disability benefits. You must meet the terms set out in the policy to qualify for the benefits to collect from the insurance company. It is also reasonable for the insurance company to request information to verify your claim. However, some companies deny long term disability claims, or they terminate payments that have begun, even when a claim is legitimate.
Some insurers have instituted policies to delay payments, unfairly deny payments, and actively defend claims by their own policy holders. These actions are totally inconsistent with the marketing program of these companies. They use promises of trust and fidelity when the policy is sold, and then, when the day to pay the benefits comes, they leave the insured without the benefits they need. These practices don’t fulfill the promises of the insurance policy and are improper claims practices. Unreasonable denials of insurance claims are also called vexatious refusal or bad faith.
Long term disability contracts are first party coverage. This means that the contract involves the policy holder (you) and the insurance company (second party). The insurance company’s duty is to pay benefits to you if you meet the terms of the policy.
Unfortunately, sometimes insurance companies act in bad faith. Bad faith is a state of mind in which the insurer is actively putting its own interests ahead of the interest of the insured, and denies valid claims without just cause, so that the insurer can benefit, rather than pay the claim owed to the policy holder.
Unscrupulous insurers can act in bad faith in many ways. These may include:
- Long delays in the claims process.
- Making unreasonable requests of the insurer.
- Making partial payments rather than full payments owed on a disability claim.
- Concealing policy terms or benefits from the policy holder.
- Incorrect classifications of injuries.
- Using unscrupulous doctors to support a denial.
- Unfairly investigating a claim.
Denied Claims & More
Denying claims is big business. Insurance bad faith happens to people every day in the United States, but it does not have to happen to you. The law requires that insurance companies honor their contracts and keep the promises that they have made and for which they have been paid. However, as a contract between the insurance company and the policy holder is a private contract, it is not subject to any oversight that effectively regulates how the insurance companies handle their claims. When this behavior is unfair or when the insurance company is acting in bad faith, you may take action to enforce your legal rights. This is where an experienced attorney who handles injury and insurance matters can help you.
If you have a disability insurance policy that you purchased individually, your case will be governed by the law of the state where your policy is applicable. If your disability policy is provided through your employer, it will be governed by ERISA.
Assistance with Long term Disability Insurance Claims
When confronted with long-term disability insurance claim, the stakes are high, and many people are confused by the complex terms of the insurance contract and the claims process. Many times customers of insurance companies simply accept the treatment they receive from the insurer because they do not believe there is anything else they can do. Some people choose to represent themselves, without the necessary knowledge to protect them or navigate the legal system. Don’t risk losing your legal rights or your right to appeal. If you have any questions regarding about disability claims, please refer to our frequently asked questions page about disability insurance.
FAQ: Disability Insurance
What types of disability insurance plans are there?
There are a number of different types of disability insurance plans. Some short terms, some long term, and each with a variety of different terms and conditions. However, there are some common features of disability insurance plans. First, disability insurance plans are issued by a private insurer, and should not be confused with Social Security Disability Insurance (SSDI).
Social Security Disability Insurance is a program offered by the federal government that covers disabled individuals. Private disability insurance is provided either by direct purchase or through your employment as part of a benefits package. Private disability insurance is also not to be confused with workers’ compensation, which is a state mandated program that covers injuries or illnesses arising out of workplace injury and covers medical bills and wage replacement. Private disability insurance, whether long term or short term, is a contract between a private insurer and an individual or a group (employer provided), which pays a set amount of benefits if you become ill or injured, such that you can no longer perform your job. Tell a Columbia personal injury attorney about what you are going through.
Do I have to be disabled from any work, or just my job or profession?
Different types of private disability insurance plans have different terms. Some plans are written specifically for a particular job or profession. If you become ill or injured and are unable to continue your specific job or profession you are considered disabled and will be entitled to the benefits. Sometimes these policies have a provision like this, but it is limited for a period of years, for example 5 years, after which you must be disabled from any employment to continue being disabled. However, a majority of plans require you to be disabled from any full time gainful employment, and many are limited to specific occupations held prior to disability.
What is the difference between short term disability coverage and long term disability coverage?
Short term disability coverage is a temporary disability benefit usually lasting between six months and one year. An insurance policy may have both short term disability coverage and a long term disability benefit, or you may have more than one policy. Long term disability insurance coverage provides benefits for a longer term, usually 5 years or up until an age closer to retirement. Most policies end around age 65, but individual policies can go longer, depending upon the individual terms of the policy.
What is meant by a disability policy that is occupation specific?
Disability policies are sold with different terms and conditions. Common differences between policies are those that are “occupation specific” or “any occupation”. You should ask the agent which sort of policy you are purchasing. As the terms imply, occupation specific usually refers to the fact that if you are disabled from your specific occupation then you will be considered disabled. Any occupation policies require that you be disabled from any occupation before they will pay benefits. It is also important to be aware of the specific terms that apply to these general descriptions.
For instance, even occupation specific policies, such as one for a physician, can vary greatly. A physician may believe he has an occupation specific policy because it is for a doctor. However, a cardiothoracic surgeon would want an occupation specific policy for cardiothoracic surgeons, not any physician, because if he could no longer be a surgeon because of a disability, he may still be able to function as a clinician who would make substantially less. Therefore, the cardiothoracic surgeon needs an occupation specific policy that is explicitly specific to his profession to be adequately protected.
With the disability policy, are there any illnesses or impairments that are excluded from coverage?
Yes. Typically, disability policies will have specific illness or impairment exclusions where they will provide no coverage. You should ask the agent at the time of sale for a specific copy of the policy that will be issued, so you can satisfy yourself as to the illnesses or impairments that are excluded.
What is an “own occupation” disability policy?
“Own occupation” means that you are not able to perform the substantial material responsibilities of your occupation at the time you became disabled. If you cannot perform those responsibilities in the usual course of your business because of the disability covered by the policy, then you may be disabled.
What is meant by the substantial and material duties of my occupation?
Substantial and material duties of your occupation are meant to encompass the scope of your work. There is no specific test to determine those duties or your ability to perform them. This analysis will be based upon the facts. However, an insurer cannot deny a claim if a person cannot perform the duties because of the physical restrictions, or as a result of pain. Thus, while you may be able to continue your work, but you are in great pain, you would qualify as being disabled as long as the pain was medically diagnosable.
What is a modified own occupation policy?
Modified own occupation disability policies are policies in which you are protected from disability in your own occupation for a term certain of years less than your full work life. Thereafter, they convert to any occupation policies.
My employer provided my long term disability coverage. Does this affect my claim?
The fact that your employer provided your disability coverage most likely means that it is governed by the Employment Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that applies to most employee benefit plans that are not provided through government plans, unless you are employed by a governmental entity. There are also other accepts that may prevent your particular employer-provided plan from not coming within the terms of ERISA. This is one of the reasons it is important to have an experienced attorney handle your claim.
If your claim is governed by ERISA, then the claims process and decisions of people making the claim are entitled to significant deference by the courts. If your claim should reach a court it will be reviewed in federal court; generally speaking, it will be reviewed on a limited basis. Therefore, it is incredibly important to retain an attorney early to help you with the claim or any first level denial so that the appeal process is closely followed and all necessary facts supporting the claim are submitted.
The most common standard applied by the courts in reviewing ERISA claims is an abuse of discretion standard, which often results in a denied claim being withheld. Attorneys can be effective in helping you receive the benefits that you are entitled to, if you seek assistance early enough and the claim is properly handled. If you need assistance with an insurance claim provided by an employer, you should contact one of our attorneys immediately.
How do I qualify to collect on my disability policy?
Whether or not you qualify for disability payments under a short term or long term disability policy depends on whether your injury or illness qualifies for coverage under the specific terms of the insurance contract. Most contracts set forth specifically qualify conditions in the terms of the policy. Generally speaking, these conditions include diseases, disorders, and injuries, including psychological conditions, which lead to significant impairments in daily living and function. If you believe you have a claim for disability payments under the terms of the policy, it is important to follow the claims procedure in the policy closely. An insurance policy is a contract between you and the insurance company, and describes the conduct required of both parties.
The insurer is mandated by law to pay the benefits outlined in the policy if you meet the terms of the insurance contract. Sometimes, claims are denied because a person does not meet the terms of the contact, but often with disability policies it is a dispute of whether or not the illness, disorder, or injury is sufficient to meet the terms of the policy. As you might expect, since insurers save money by not paying a claim, they have teams of doctors and other experts who will provide them with basis to deny your claim. Therefore, it is important to seek expert assistance as soon as you learn of an unfavorable decision on your application for disability benefits.