The Disability Claims War

People forced by circumstances to seek income disability benefits should keep one mantra in mind at all times:

                      I am in a war with my insurer and I should always act accordingly.

A little understanding of the mechanics of the disability insurance business will make the above statement abundantly clear:

• An insurance company earns its income from premiums and interest on investments.
• The company has some control over premium income.
• The company has no control over the interest markets.

Interest markets have tanked in the last few years meaning substantially less income for the insurance company. Therefore:

• The company pays out overhead expenses, salaries, and benefits from income.
• What is left over is profit.

So, if overhead and salaries remain the same, the company must reduce benefits to maintain profits. Therefore, it will use every method and excuse it has to discourage and minimize disability benefit claims:

• First and foremost, deny, deny, deny claims to discourage policyholders.
• If that fails, make the filing of a claim difficult with forms that encourage errors.
• If that fails, lose claim material and delay responding to claimants.
• If that fails
, use a stable of captive doctors to denigrate and minimize the disability claim even without the doctors examining or even seeing the claimant.
• If that fails, try to video the claimant in a moment which will throw the claim in doubt.
If that fails, cull the Social Media for a post or two that can be offered as proof that the policyholder is faking the claim.

This list could go on and on. Insurance companies have always been in the business of fighting claims and they have thousands of claims adjusters and attorneys whose job it is to defend against and discourage claimants.

Down through the decades, these minions have come up with endless ways to slow or defeat disability claims. Insurers have an arsenal of ways to say “NO!”

If your disability claim happens to fall under ERISA, the situation becomes worse. In a 1989 case, Firestone v. Bruch, 489 US 101 (1989), the U.S. Supreme Court made the situation more dire by decreeing that courts had to give deference to the ERISA plan administrator. Since the administrator is usually the insurance company which would have to pay the benefit, it is not hard to guess how these decisions go.

This is why a disability claim is likely to become a declaration of war. Insurance companies which fight the war everyday are aware of it and treat it as such. Inexperienced claimants are many times the unwitting victims of this war.

To win this war (and many times they do), claimants must understand what is happening and why it is happening. Above all, they must persevere.

If you have a valid claim, “giving up” is not an option. It is exactly what the insurance company is hoping for.





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