Well, it is now official: the biggest criticism of the life and health insurance industry, according to a study by Wolters Kluwer, is its failure to acknowledge, pay, investigate or deny claims within specific time frames. We could have told you that, but it’s nice to hear it from a massive global publishing, information and technology company. Second most common criticism is the insurance business’s failure to adhere to advertising requirements. Here’s where we beg to differ.
The average consumer doesn’t care a hoot if their insurance company adheres to requirements that have been set by regulatory agencies. The bigger, more important issue, and the one that we find most ironic, has to do with the huge disconnect between the branding strategies that these companies spend millions on, and the actual policy owner experience when a claim is filed.
If you’ve been watching broadcast TV or seeing ads on the internet in the last five years, you can probably recite the oddball animal or human character or comic set up that belongs to each of the major insurance companies. But when you fill out papers to file a claim for a disability insurance policy, there’s no warm and fuzzy in the response.
The enormous gap between the fun videos and the reality creates a cognitive dissonance that benefits only the ad agencies that get to have fun with million-dollar campaigns.
Here’s a crazy idea – spend less on advertising and more on properly handling claims. Talk about a disruptive concept.
Then we get to the rest of the criticisms, which are right on point:
Failure to provide required claims and underwriting disclosures including those concerning coverage issues, policy replacements and fraud warnings, improper documentation of underwriting and claim files, failure to adhere to required claims appeal processes including timeframes and disclosures and our number one favorite, failure to pay claims properly in accordance with policy provisions
Our message to the insurance industry? It would not be difficult to reduce many of the complaints simply by following through on the policies that you create. If a claim is filed, by all means be thorough and ensure that the person is truly unable to work, but don’t go digging in dark corners for a way to get out of paying. Play fair. If you write a policy, stand by it.
Most of the clients who come to us are in terrible financial situations, on top of terrible health problems. They would love to be able to go back to work. Having to do battle with the disability insurance company, while navigating health insurance paperwork and dealing with their illness is overwhelming and, frankly, miserable. Call us naive, but we think a company that pays its claims, doesn’t abuse its policyholders and follows its own contracts would revolutionize the insurance industry.
If your disability insurance company wants to spend more money on advertising than it does on claims and you have questions about setting things right, give our office a call at 877-LTD-CLAIM (877- 583-2524).
Justin C. Frankel is committed to fighting for the rights of clients when their long term disability insurance claims have been denied, delayed or terminated.
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