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Think You're Covered if Disability Strikes? Think Again!

By: Attorney Anne P. McHugh & Attorney E. Elizabeth Sweetser
The Problem

A surgeon falls, resulting in a permanent arm injury that prevents him from practicing his specialty. A radiologist has inoperable progressive cataracts and can no longer interpret imaging studies. A chiropractor cannot manipulate patients because of degenerative cervical disk disease. Like many high-income professionals, these men and women had the foresight to protect themselves by purchasing “occupation-specific” long-term disability insurance policies.

These are all real claims denied by Unum, Paul Revere, Equitable or Provident, which control nearly a third of all disability policies written in the U.S.

Insurance Company Tactics

The chiropractor experienced the typical modus operandi of the carrier: After paying the claim for a period, UNUM terminated benefits after it “subjected … [the chiropractor] to a biased medical examination, then re-characterized her occupation as a business owner, rather than a chiropractor, and claimed she was not totally disabled [in her profession] because she could perform bookkeeping or teach a class or see two patients per hour” wrote a California judge in a strongly worded opinion upholding a large jury verdict against UNUM.

Wrongful denial of claims made on occupation-specific long-term disability insurance policies is a widely reported nation-wide epidemic. One state levied a hefty fine because of it, stating that UnumProvident has a corporate mentality of “looking for every technical legal way to avoid paying a claim.”

The campaign to deny legitimate claims continues because the cost of paying benefits on these types of policies is so high for insurers.

Be Proactive

If you own these polices, make it harder for insurers to deny your claim.

First, select your treating physicians wisely. Make sure they have excellent credentials and credibility in their specialties. It is more difficult for insurance companies to dismiss the opinion of a physician recognized as an area expert in the field.

Second, make sure your physicians fully document your condition. A favorite insurance company defense is that you made the claim because your policies pay you benefits equal to or more than you can earn by working. To rebut that defense, make sure there is clear evidence of the progression of your medical condition over time in your doctor’s records. Review the completed Physician’s Statement forms carefully and ask your doctor to correct any misstatements before the forms are submitted to the insurance company. If there is anything on the form that appears equivocal or contradictory, the insurance company will use it to against you. Frequently the physician’s staff members prepare these forms, sometimes resulting in inaccurate or misleading information – exactly what insurers look for.

Third, make sure your treating doctors are prepared to support your disability claim. Any treating doctor not willing to support your claim will be sought out and used against you.

Next, if the insurance company requires an Independent Medical Examination (“IME”), insist on a specialist in the specific area of your disability.

Finally, a tip for organizations in which the owners all have these kinds of policies: If the intent is that the policies be individually owned rather than employer-sponsored, make sure your actions are consistent with your intentions. Do not allow the employer to become involved with any issue concerning these policies because the insurance company will contend that the policies are employer-sponsored and therefore governed by ERISA, a statute which contains some standards favorable to insurance companies. Courts listen to insurance companies’ ERISA arguments if the employer has involvement with the policies.

This proactive approach will not guarantee success because insurance companies have legions of medical experts to support claim denials. However, this advice can help you short circuit some strategies used by insurers to delay and deny payment of your claim.

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