We are noticing a disturbing trend in our office. Phone calls are coming from policy owners who are contacting us after they have tried and failed to appeal a termination or denial of long term disability insurance benefits. People often do not think they are permitted to engage an attorney to handle the issues, or think it is simple enough to handle on their own. Too often, these people are wrong, and failing to engage counsel for this critical timeframe of their claim becomes their undoing.
Here’s the problem: unlike other kinds of insurance coverage, disability insurance is a very expensive cost for insurance companies. For example, a claim filed by a private policy owner, age 46, with a monthly benefit of $4,000, is the equivalent of waving a big red flag under the nose of an angry bull. $48,000 a year for what might be as long as nineteen years is a huge exposure and cost for the long term disability insurance company.
Even a smaller disability policy, one owned by an employee under the employer’s benefits umbrella for $2,000 a month, is a problem if the employee is relatively young.
Ask any actuary. The business of denying, delaying or requiring further information is not a personal judgment on the person making the claim, although it often feels that way to the policyholder and the family. It is a very hard and fast numbers game. How much is it going to cost the insurance company to pay out on the claim over time?
Remember, there are no real penalties for the insurance company if the claim is delayed or denied. They generally cannot be hit with punitive damages. So while you are struggling to figure out how to pay the mortgage while your disability insurance company determines whether or not it is going to pay a claim, their costs for the delay or denial are zero. Your costs, and the impact the delay/denial has on your financial and personal life can be staggering.
Appealing a denial from a long term disability insurance company is not a do-it-yourself project. This is one where experience and knowledge is necessary and vital to the potential success of the claim, and the reinstatement of financial security.
If your disability insurance claim has been denied and you are considering filing an appeal on your own, call our office. The stakes are high – and you don’t have to go it alone.