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The Advantages and Disadvantages of Group Disability Insurance

In a world where medical uncertainties abound, having a safety net for unexpected medical events is crucial. Disability insurance provides that financial safety net, ensuring that individuals who are unable to work due to illness or injury can still support themselves and their families. One common avenue for obtaining disability insurance is through group disability insurance plans, which are often offered by employers.

If you are considering purchasing disability insurance, one issue you may be facing is whether to enroll in a group plan offered by your employer or to procure an individual policy independent of your employment. Whatever decision you make, there are both advantages and disadvantages of enrolling in a group policy and purchasing an individual policy. Therefore, your decision should be based on how these advantages and disadvantages are suited to your situation.

If you work for an employer who sponsors a group benefit plan, that plan is most likely governed by the Employment Retirement Income Security Act of 1974, or ERISA, a federal statute that provides a set of rules and regulations concerning everything from issuing the policy to making benefits determinations. Below we discuss some of the advantages and disadvantages of enrolling in a group disability plan.

Advantages of Group Disability Insurance

Ease of Qualification: Unlike individual disability insurance, group plans typically have less stringent underwriting requirements. This means that individuals with pre-existing health conditions or a history of illness may find it easier to qualify for coverage through a group plan. For employees with health concerns, this accessibility can be a lifeline in obtaining crucial coverage. And, enrolling in a group plan is a streamlined process for you to acquire coverage. Typically, the plan has been established for some time and your employer handles the administrative aspects of enrollment, so your role boils down to simply deciding the level of coverage you want. For an individual policy, your role in the administrative process of obtaining coverage will likely be much more involved. Thus, these plans allow you to get coverage more quickly and easily than individual policies.

Less Expensive: Enrolling in a group policy is generally less expensive as compared with individual policies. Group plans necessarily involve a minimum number of members, which allows the insurance company to provide the coverage for a lower cost to each member of the group. Additionally, many employers contribute some or all of the premiums for group coverage. Therefore, you may be able to get coverage without paying anything more out of your pocket, whereas you may need to pay the premiums for an individual policy on your own.

Governed by ERISA: Your policy will likely be governed by ERISA, which may have some advantages for you. Because ERISA is a federal statute, this means that should you have occasion to bring a lawsuit against your employer, insurance company, or other plan fiduciary, you can do so in a federal district court rather than in the state court system. The federal court system often moves more efficiently than its state court counterparts and federal judges know ERISA well and are adept at interpreting it. Also, a stated purpose of the ERISA statute is to protect those who are insured by a disability policy, and therefore many ERISA regulations may be more favorable to you as an insured than the state laws.  Moreover, while some favorable state laws are not applicable in ERISA, federal law under ERISA makes it much easier for you to collect attorneys’ fees if you have some success in your lawsuit.

Disadvantages of Group Disability Insurance

Disadvantage Policy Provisions: As compared to individual coverage, group plans may have less favorable standards for receiving disability benefits. A group plan’s definition of what constitutes a disability may be more vague or restrictive than that in an individual policy. Specifically, a group plan will typically consider you disabled if you are unable to perform the requirements of your “own occupation” for the first two years of receiving benefits, but after two years, will consider you disabled only if you are unable to perform the requirements of “any occupation.” This change can result in you receiving benefits for two years because they conclude that you are able to perform “any occupation” for which you are qualified by education, training and experience. Most individual disability insurance policies do not have these provisions.

Caps on Certain Types of Benefits: Benefits will likely be capped with some types of disabilities. It is typical in group disability plans to have maximum benefits payable for a short period of time regarding mental-nervous medical conditions, often two years. Individual policies do not typically have such limitations.

Offsets that Reduce Benefits Payable: Group policies almost always contain certain offsets, called deductible income, that will reduce your benefits paid under the disability policy. For example, if your disability insurance provides for a monthly benefit of $5,000, and you also qualify for monthly disability benefits from another source, like state disability benefits or Social Security Disability Income (SSDI) benefits, of $2,000, the group plan will reduce your benefits by that amount and will pay you $3,000, so that the total monthly benefit you receive from all sources is $5,000. This can be further complicated if your group plan insurance company pays you benefits for some time, then you later get a favorable decision as to state or SSDI benefits, as your group plan insurer will expect you to then pay it any applicable offset because it “overpaid” you.

Less Control: You will have less control over your policy with a group plan compared with individual coverage. Group plans often do not offer any portability, so if your employment ends, so does your coverage. Also, your employer and the insurance company have the power to alter or even terminate a group plan without your input. And your group plan almost certainly provides broad, umbrella-type coverage that will apply to the entire group, and you will not have the option of customizing the coverage to suit your circumstances. Obtaining individual coverage gives you more control over these factors.

Tax Implications: While the premiums for group disability insurance plans are often paid with pre-tax dollars, the benefits received in case of disability are usually taxed as income. This can result in a lower net benefit for the insured individual compared to benefits from individual disability insurance policies, which are often tax-free. Understanding the tax implications is essential for accurate financial planning.

Limited Choice of Providers: Group disability insurance plans typically limit participants to a specific list of insurance providers chosen by your employer. This limitation means that individuals may not have the opportunity to shop around for the best coverage or to select a provider that aligns with their preferences. Limited provider choices can impact the quality of service and flexibility in managing claims.

Whether you decide to enroll in a group plan or obtain individual disability insurance coverage, obtaining disability insurance will likely present you with considerations and issues that you will have to weigh in making the decision. And, once you have disability insurance, if your disability claim is denied, call on the disability insurance experts at McKennon Law Group PC to get the help you need.

Introduction

Long-term care (LTC) insurance is designed to provide financial security for people facing challenges that come with aging, such as those suffering from chronic medical conditions or disabilities that require assistance with daily activities. However, recent trends indicate a growing concern: long-term care insurers underpriced their policies several years ago and now that those insured by these policies are coming of age, LTC policyholders are filing many claims. As a result, these insurers are denying more legitimate claims than ever. If you or someone you know purchased a LTC policy in the late 1990s or early 2000s, there is a good chance that a claim made under the policy will be denied, regardless of the merits of the claim. And the likelihood of such a claim being denied will only increase over time, as the insurance companies expect the number of LTC claims to substantially increase for the foreseeable future.

The Underpricing Dilemma

Many insurers initially offered affordable premiums to make LTC insurance an appealing option for policyholders. The problem is that as policyholders age and begin to need care requiring the benefits of these policies, the actual costs of providing such services can be significantly higher than the premiums collected. This results in a precarious financial situation for insurers, leading them to take extreme measures to maintain profitability.

Some factors that contribute to the underpricing dilemma include:

  1. Misjudgment of future claims: Insurers initially underestimated the number of policyholders who would file claims and the duration and extent of care they would eventually need. As a result, insurers find themselves with a more significant financial burden than expected.
  2. Increasing healthcare costs: The cost of healthcare services has been steadily rising over the past several years. These escalating costs place additional strain on insurers attempting to honor their policies.
  3. Low interest rates: LTC insurers invest the premiums they collect to generate income. With persistently low interest rates in recent years, the returns on these investments have been insufficient to offset the growing liabilities from claims.

The Denial of Legitimate Claims

The underpricing problem has caused LTC insurers to resort to denying legitimate claims, often leaving policyholders in dire straits. This unlawful practice can have severe consequences for those who have invested in these policies for years, believing they would receive the coverage they paid for. For many policyholders, not receiving the benefits they were promised and to which they are entitled under their policies can be catastrophic and can leave them without any means of receiving the care they desperately need. The denial of legitimate claims manifests itself in several ways, including:

  1. Strict policy language: LTC insurance policies often contain complex and ambiguous clauses that may be exploited by insurers to deny claims. Even seemingly minor discrepancies in documentation or the interpretation of policy language can result in a claim being denied.
  2. Post-Claims underwriting: Some insurers have engaged in a controversial practice known as retroactive underwriting, which involves scrutinizing policyholders’ health histories and medical records after a claim is made. If any discrepancies or undisclosed medical conditions are discovered, the insurer may use this information to deny the claim. The upside for the insurance company is that it can collect premiums for several years and invest those premiums to finance its business, then simply refund those premiums (but not the income the insurer benefitted from) without paying the benefits promised to the policyholder.
  3. Delay tactics: Some insurers employ delay tactics to extend the time policyholders must wait for a claim decision, such as requesting additional documentation or medical evaluations, to stall the claims process. This can place undue stress on policyholders who are already dealing with the challenges of LTC needs.
  4. Denials based on supposed inadequate medical evidence: This is perhaps the most oft-used reason for a denial of LTC claims. Insurers hire biased medical professionals to assess medical evidence and then assert that the medical evidence is simply inadequate to support a valid claim for LTC benefits.

Protecting Your Interests

Given the potential pitfalls associated with LTC insurance, it is essential for policyholders and potential buyers to take steps to protect their interests, such as:

  1. Thoroughly review policy terms: Before purchasing LTC insurance, carefully review the policy terms and conditions. Seek legal counsel if needed to ensure you understand the coverage and any potential pitfalls.
  2. Transparency is key: When applying for LTC insurance, be transparent about your health history and any pre-existing conditions. Failing to disclose this information can give insurers grounds for denying claims in the future.
  3. Thoroughly document your claim: when you prepare to file a claim, make sure you assemble all necessary evidence you will need to adequately document and support your claim. Be sure you are able to obtain physician support for an inability to perform the required activities of daily living.
  4. Document diligently: Keep detailed records of all interactions with the insurer, including phone calls, emails, and written correspondence. This documentation can be valuable if you need to dispute a denied claim.
  5. Seek professional assistance: If your claim is denied and you believe the denial is improper, seek legal counsel to navigate the appeals process.
  6. Stay informed: Stay up to date with the latest developments in LTC insurance and the insurance industry as a whole. Being informed will help you make better decisions regarding your policy.

Conclusion

LTC insurance is supposed to provide peace of mind and financial security to individuals as they age. However, the underpricing of policies and the denial of legitimate claims by LTC insurers have seriously undermined the peace of mind and financial security that LTC policyholders expect. It is therefore imperative that those considering filing LTC insurance claims are informed, cautious, and proactive in protecting their interests. By understanding the potential pitfalls and taking measures to mitigate them, policyholders can better ensure that their insurance coverage serves its intended purpose during their time of need. If you have made a claim for LTC benefits that has been denied or delayed, contact the McKennon Law Group PC for a free consultation.

Many disability insurance policies provide benefit payout periods that are much longer for disabilities caused by physical conditions as opposed to mental conditions. Typically, while allowing benefits for disabilities caused by mental or nervous conditions are paid only for a limited time period, often two years. Additionally, insurance companies operate for the purpose of generating profit and therefore have a substantial financial motivation to avoid paying benefits whenever possible. If an insurance company is unable to justify denying a disability claim outright, the next best action they can take to save money is to limit the benefits it pays out to as short a period as possible. Thus, given the choice between paying benefits related to a physical condition versus a mental or nervous condition, any insurance company will logically prefer to only approve a claim for a mental or nervous condition, and not for a physical condition. To complicate matters, there are many times when a claimant suffers from both a physical condition and a mental/nervous condition, which may or may not be separately disabling. On top of this, some disabling conditions, such as chronic fatigue syndrome, are subjective in nature, lacking objective testing.  When a claimant is disabled due to such a condition, it will be difficult, if not impossible, to provide objective evidence to the insurance company to prove such a disability.

A recent District Court decision, Veronica L. v. Metropolitan Life Insurance Company, 647 F.Supp.3d 1028 (D. Oregon 2022), sheds light on how insurance companies handle claims based on subjective conditions and how claimants can recover their much-needed benefits. The plaintiff, Veronica, made a claim for long-term disability (LTD) benefits with MetLife. She had been diagnosed with PTSD, major depressive disorder, and generalized anxiety disorder, all mental/nervous conditions. She had also been diagnosed with chronic fatigue syndrome (CFS).

MetLife approved Veronica’s claim for LTD benefits based on her PTSD, anxiety, and depression. During its review of her claim, MetLife conducted a “paper review” of her medical records, done by a physician who reviewed Veronica’s medical records without examining or speaking directly with her. The paper review physician concluded that Veronica had no restrictions or limitations caused by CFS, supporting the conclusion with vague language: “based on the medical documentation, it is understood that the claimant’s low energy [is] likely related to psychological condition.” A second paper review physician also “found insufficient support for a diagnoses of CFS” based only on Veronica’s medical records, which included no interaction with Veronica and no discussion with her treating physicians.

Veronica began treating with a new physician who noted that she had fatigue that had progressively worsened over the previous three years. The new physician provided records to MetLife, but by the time MetLife received the records, it had already determined that Veronica was entitled to LTD benefits subject to the mental/nervous limitation of three years. Veronica appealed MetLife’s decision, highlighting records and notes from her physician supporting her position that she was disabled due to CFS, a physical condition, independent of her mental/nervous conditions.

In reviewing Veronica’s appeal, MetLife hired a third paper review physician, who’s opinion was, predictably, that Veronica had no restrictions or limitations based on CFS, “given the lack of objective evidence.” In response to this, Veronica’s treating physician asserted that CFS is difficult to assess through objective evidence but rather is determined by personal interaction with the patient. Simply put, CFS is inherently subjective in nature and objective evidence, such as imaging or lab work, does not exist. This did not change the opinion of the paper review physician, who again pointed to a lack of objective evidence to support his conclusion that Veronica was not disabled due to CFS.

The court decided the matter on de novo review, meaning that it would determine in the first instance if Veronica had adequately established that she was disabled under MetLife’s plan. After reviewing the evidence, the court found that MetLife had based its decision on incomplete information and had erred by failing to conduct an independent medical exam (IME). Citing Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666 (9th Cir. 2011), the court noted that there are no objective laboratory tests for CFS, its etiology is unknown, and a diagnosis of CFS is based on a patient’s subjective reports of symptoms, reviewing her medical history, and ruling out other disorders. Because there was no means of objectively proving that she had CFS, evaluating Veronica’s disability was essentially a credibility determination.

The court found that Veronica’s treating physicians provided credible evidence that she in fact suffered from CFS; the evidence included a substantial history of subjective complaints by Veronica regarding her lack of energy, her inability to perform more than one major task per day, the fact that she no longer was able to do activities she had previously enjoyed, and requiring abnormally long periods of sleep. Additionally, Veronica had sought treatment for her CFS for several years but had not been able to find any treatment that alleviated her symptoms.

Because Veronica had presented evidence that she was disabled due to CFS, including her uncontested diagnosis of the condition, her own statement about her subjective symptoms, and corroborating statements made by her treating physicians, the court explained that because CFS cannot be objectively measured, MetLife would need to make a determination that Veronica’s claim was not credible in order to justify denying her LTD benefits beyond the mental/nervous limitation period.

The court explained that MetLife had a duty to conduct an adequate investigation of Veronica’s claim, citing Petrusich v. Unum Life Ins. Co. Of Am., 984 F. Supp. 2d 1112 (D. Or. 2013). While ERISA did not require MetLife to conduct an IME, failure to do so may raise questions about the thoroughness of its review and determination. The court noted that failure to conduct an IME may be particularly dubious when a claimant’s condition is based on subjective symptoms, citing Robertson v. Stand. Ins. Co., 139 F. Supp. 3d 1190 (D. Or. 2015). In this case, MetLife could have conducted an IME, which could have provided the evidence it needed to determine whether Veronica was disabled from CFS but declined to do so. Especially considering that MetLife expressed doubt as to Veronica’s credibility and the severity of her subjective symptoms, for MetLife not to conduct an IME meant that its decision was based on inadequate evidence. None of Veronica’s treating physicians ever questioned her credibility, nor did they opine that she exaggerated symptoms yet MetLife still discredited her subjective symptoms anyway, without providing any rationale for doing so. However, MetLife was obligated to consider Veronica’s self-reported symptoms because no objective tests exist for CFS; MetLife could not condition her LTD benefits on objective proof of CFS because it is a recognized condition but is not objectively provable.

ERISA does not have a rule requiring treating physicians’ opinions to get more deference than other physicians but treating physicians have more opportunity to know and observe a patient than those who have not examined the patient. See Black and Decker Disability Plan v. Nord, 538 U.S. 822 (2003). Especially with a condition like CFS, which requires examination of a patient’s symptoms and medical history, that patient’s treating physician is likely in a better position to diagnose such a condition than a paper review physician. In this case, MetLife’s paper review physicians did not provide any explanation for discounting the opinions provided by Veronica’s treating physicians, who had expertise with CFS. Thus, MetLife’s decision was improper.

It is vital to understand your insurance company’s obligations in reviewing your disability claim. Especially if your condition is something like CFS, for which objective evidence is impossible to provide, accepting the insurance company’s denial of your claim may be tantamount to foregoing disability benefits to which you may be entitled. To avoid such circumstances, you should consult with an expert disability insurance claims attorney with expertise and knowledge of ERISA and insurance companies’ obligations. The team of attorneys at McKennon Law Group PC have exactly such expertise and knowledge and can help you navigate your disability claim and appeal of the insurance company’s denial of your claim. If you have made a claim for disability benefits or intend to do so, contact McKennon Law Group PC immediately for a free consultation.

Introduction

Long-Term Care (LTC) insurance is designed to cover services and expenses that are not covered by regular health insurance when the insured suffers from a chronic medical condition, disability or disorder, like dementia. These policies typically pay a set daily benefit for reimbursement for needs such as nursing home care, assisted living facilities, home healthcare, home modifications, adult day care services, and care coordination. In California, LTC Insurance is defined in Insurance Code Section 10231.2.Under the statute, LTC insurance includes:

  • A. Any insurance policy, certificate, or rider advertised, marketed, offered, solicited, or designed to provide coverage for diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital.
  • B. All products containing coverage for care in a nursing home, convalescent facility, extended care facility, custodial care facility, skilled nursing facility, or personal care home; home care coverage including home health care, personal care, homemaker services, hospice, or respite care; or community-based coverage including adult day care, hospice, or respite care.

Typical LTC policy terms provide for payment of a daily benefit amount and will pay an insured the amount incurred each day they are in a qualified care facility, up to this daily amount. There is often also a total maximum amount payable from which the benefits paid are deducted. A typical LTC policy will pay benefits if the insured is unable to perform a given number of Activities of Daily Living for a given period of time due to a loss of functional capacity, or if they demonstrate severe cognitive impairment.Many early LTC policies provide unlimited lifetime benefits. Most issued today contain a stated limit in lifetime benefits.

The Underpricing Dilemma

In the late 1990s and early 2000s, there was a trend in the insurance industry to issue LTC policies at attractive rates. Many who purchased these policies were middle-aged at the time and are now reaching the age at which they now need to receive the benefits they expect to be paid under the LTC policies. Insurers now realize that they may have issued policies with rich benefits at premiums that are too low to profitably underwrite them. In other words, insurers made erroneous pricing decisions and are now reaping the costs associated with these poor decisions.

The Denial of Legitimate Claims

As a result, insurance companies are denying legitimate claims, including using many of the same tactics that have led to substantial insurance bad faith and punitive damages awards in lawsuits over disability claim denials and LTC claim denials.

For example, LTC insurers deny claims based on illegal policy provisions. In California, insurance companies may not include policy definitions that conflict with statutory provisions as required pursuant to state law. A policy may require the insured to demonstrate “severe cognitive impairment” for a claim to be approved, and the insurer will insert its own definition of what constitutes “severe” impairment. But if “severe cognitive impairment” is defined by law, the insurer’s definition may not comply with the law. Under California law, “Severe cognitive impairment” means a loss or deterioration in intellectual capacity that is (1) comparable to (and includes) Alzheimer’s disease and similar forms of irreversible dementia; and (2) measured by clinical evidence and standardized tests that reliably measure impairment in the individual’s short-term or long-term memory; orientation as to people, places, or time; and deductive or abstract reasoning. See Ins. Code, § 10232.8(e); IRS Notice 97-31.

Insurers might also use deceptive language in their claim forms to wrongly deny claims. The covenant of good faith and fair dealing requires insurers to thoroughly inquire into all possible bases to pay a claim before denying it. See Egan v. Mutual of Omaha Ins. Co., 24 Cal.3d 809 (1979). Also, the insurer has the burden of seeking out information relevant to a claim, so it must communicate with the insured and his physicians in a manner calculated to elicit an informed response. See Hughes v. Blue Cross of Northern California, 215 Cal.App.3d 832 (1989). However, insurers still will strategically word forms to allow for ambiguities to justify denials, such as using varying degrees of cognitive impairment – “mild,” “moderate,” “severe” – then denying any claims not marked “severe.” But the form will use a different definition for “severe” than the statutory definition. Such a denial may not comply with the law.

Insurers also use abusive tactics designed to take advantage of vulnerable insureds, such as insisting on multiple forms to be regularly submitted by each insured, her physicians, and her guardian, then denying the claim for any error found in any of the forms, however minor. Or the insurer will require specific information from the insured in a confusing manner that prompts the insured to call to inquire about what information to provide, then the insurer will pass the insured around from one person to another without ever providing an answer. When the insured does not provide the information on time, the insurer may deny the claim.

Clearly, LTC insurers issuing these policies did not expect to receive so many claims under their LTC policies. And the insurers have now determined that they can expect the number of LTC claims to increase substantially in the future. Because insurers are currently using these tactics to deny legitimate claims, it is likely that insurers will become even more aggressive in denying LTC claims as more claims are filed in the future.

Protecting Your Interests

If you have made a claim under an LTC policy, or plan to make a claim soon, you can expect that your claim will likely be denied. If your LTC claim is denied, you should contact a knowledgeable and experienced insurance claims LTC attorney. The attorneys at McKennon Law Group PC have the knowledge and expertise needed to determine whether a claim denial is proper and we can ensure you are placed in the best position possible to receive the LTC benefits you are entitled to under to the LTC coverage you purchased.

What is Professional Liability Insurance?

Businesses and other organizations are typically required to carry insurance, and many types of commercial insurance exist. Discussed here is one type of commercial insurance, professional liability insurance.

Like any type of insurance, professional liability insurance involves premiums paid to secure insurance coverage. When there is an event related to the policy, the insurance company or its representative is supposed to investigate the claim. If the event results in losses that are covered under the policy, the insurance company is supposed to pay out.

Professional liability insurance, which is also sometimes called professional indemnity insurance, is specifically designed to cover losses associated with errors and omissions made by certain professionals or negligence of those professionals.

Additionally, insurance bad faith claims are possible in professional liability cases, which occur when the insurer ignores its obligations under its own policies and fails to pay out claims as it should.

One of the first steps in seeking compensation from any insurance company is knowing what type of coverage your policy provides.

Who Needs Professional Liability Insurance?

Typically, businesses only need this type of insurance if they offer specific types of guidance, advice, and services. Some types of businesses that need professional liability insurance include:

  • Accountants
  • Engineers
  • IT and business consultants
  • Lawyers
  • Life coaches or trainers
  • Construction professionals

If the advice or services you provide could in any way seriously impact the business, lifestyle, or livelihood of your clients, you may need professional liability insurance. It is important to talk to an experienced professional liability insurance agent to understand what policy and insurers may be right for your company.

When Will Professional Liability Insurance Pay Out?

Professional liability cases can include a wide variety of scenarios. Some examples are:

  • An accountant makes a mistake on a tax return, resulting in a loss for a business. An error on the part of a professional in his or her line of expertise that causes damages for the client can result in a claim.
  • A construction company does not complete permit paperwork in a timely manner, resulting in long delays and more expenses for a project. This might be considered negligence because the construction company failed to act in the best interests of its client, which could result in a professional liability claim.
  • A business consultant misrepresents their knowledge in a specific niche area, resulting in a client relying on poor advice. If this advice leads to losses, the client might have a claim for damage.

Note that professional liability insurance does not cover criminal acts, nor does it cover breach-of-contract, negligence, or personal injury claims. Professional liability coverage may be denied where the claim arises out of activities not associated with the professional duties being insured Many businesses that are required to carry professional liability insurance also must carry public or general liability insurance to ensure they are covered in such scenarios. These policies are almost always known as claims made policies where claims must be made within a certain period of time after a known claim exists. It is critical that one a policyholder is aware of a potential claim, that a claim is made under the policy.

What Happens When You Have a Claim and the Insurance Company Will Not Pay?

Professional liability policies are almost always known as claims made policies. Claims must be made within a certain period of time after a known claim exists. It is critical that once a policyholder is aware of a potential claim, that a claim is made under the policy. The claim may be a lawsuit against your business or a letter accusing your company of professional negligence. It is critical that you immediately submit a claim to your insurance company.

If you have a claim against your business and believe that your professional liability insurance should cover the claim, you first need to submit a claim as soon as possible. In cases where the insurance company does not review the claim and agree to a settlement you feel is fair, you may need to seek further legal recourse, including filing a lawsuit for breach of contract and insurance bad faith.

Unfortunately, insurance companies often deny valid insurance claims. Most insurers have shareholders and others to whom they must answer financially, and the friction between profits and compensating business for their losses and defense costs can easily lead to bad faith practices. Insurance policies are typically long and complex, which allows insurance companies to take advantage of this to improperly deny claims and exclude coverage based on ambiguous policy language.

To reduce the chance that you deal with such insurance bad faith practices, consult an experiences insurance bad faith lawyer before you submit your claim or, if you have already submitted a claim and the insurance company has denied it, contact McKennon Law Group PC and schedule a free consultation to find out how we can help with your case.

You have experienced an accident or medical condition that has caused you to be unable to continue working.  Thankfully, because you had disability coverage, you were able to submit a claim for disability benefits and were approved, and you have been collecting disability benefits.  Although the benefits are not as much as your salary was, receiving the benefits alleviates much of the stress that accompanied your unfortunate situation. While things could be better, you still breathe a sigh of relief that you carried disability insurance. However, one day you receive a letter from your disability insurer saying that it has determined that you no longer meet the policy definition of total or partial disability, and you will therefore not receive any further disability benefits. You panic because you know that you will not be able to survive without the disability benefits. This type of scenario can be incredibly stressful.  And it is common.

If you receive, or plan on receiving, disability benefits, it is crucial to be prepared for your disability insurance company to terminate your disability benefits after you begin receiving them. Because paying your disability benefits are a significant cost to your insurer, it has a vested interest in finding a way to discontinue paying them to you. Thus, it is reasonable to believe that your insurer is always looking for a justification for terminating your benefits, even if the reason is improper.  They do this by conducting ongoing surveillance of you, reviewing your medical records to look for inconsistencies and or lack of support for your disability, conducting so called “independent” medical examinations with biased medical personnel or by waiting for a change in definition of disability under your policy to assert you no longer qualify for disability benefits.

If you have been notified that your benefits have been terminated or are going to be terminated, it is vital for you to take certain steps to protect your benefits.

What to Do if Your Disability Benefits Have Been or Are Going to Be Terminated

First, you should do carefully read the insurance company’s reason for terminating your benefits so you can understand exactly what that reason is. If you do not understand why your benefits have been or are being terminated, you will have an extremely difficult time presenting an effective appeal to your insurance company. If you have read the insurance company’s rationale and do not understand it, you should immediately consult with an experienced disability insurance attorney.  The knowledgeable and experienced disability insurance attorneys at McKennon Law Group PC will provide a free consultation regarding the termination of your benefits.

Second, review the policy language to see whether it supports the insurance company’s basis for termination.  It may be that your benefit period under the policy has expired and you are no longer entitled to benefits. On the other hand, it may be that the insurance company has concocted an illegitimate reason that is not supported by the policy. Without reviewing your policy, you may not understand whether the insurance company’s determination was proper.

Third, you should review the medical and other evidence supporting your disability claim. If you submitted sufficient evidence and the insurance company approved your claim, then it reversed itself without presenting new evidence or pointing out what in the existing evidence changed to prompt its determination, it is likely that the insurance company’s decision was improper. Once you have been determined to be disabled under either an “own occupation” standard (under which you are considered disabled if you are unable to perform the duties of your own occupation) or an “any occupation” standard (under which you are considered disabled if you are unable to perform any occupation for which you are suited by education, training or experience), the insurance company may not then determine that you are no longer disabled under that same standard without presenting evidence that your condition has improved.  Therefore, it is important to understand the evidence supporting your claim and how the insurance company interprets that evidence.

It may be a matter of your insurer expecting to see ongoing evidence of your disability, in which case it will request additional information from you.  This is entirely normal and expected unless you have an undisputed permanent disability condition.  If you fail to provide that information or provide insufficient information, the insurance company may be able to properly terminate your benefits under the policy.  However, if you have provided sufficient information and your insurer still terminates your benefits, there is a good chance that the insurance company acted improperly. In such a case, you should seek experienced disability insurance lawyers to assist you. The award-winning team of attorneys at McKennon Law Group PC can help you avoid having your benefits terminated, or help you recover your benefits if they have been terminated. Reach out to McKennon Law Group immediately for a free consultation.

If the insurance company has enlisted a physician to certify that you are not disabled, you may need to get your treating physician or physicians to provide additional certification supporting your position that you are disabled. Not only that, but it will also likely be necessary to present evidence that calls into question the opinions of the insurance company’s physicians or nurses.

If you are receiving ongoing disability benefits, it is important to understand the very real possibility that your insurance company will terminate them at some point.  When this happens, the best thing you can do is immediately contact the expert disability insurance lawyers at McKennon Law Group PC who specialize in all types of disability insurance issues.

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