Pinching Pennies

Disability income insurance claimants never expect an easy time with their insurers, but the recession we are going through has toughened insurer attitudes to the point of “Scrooginess”. If you hear money screaming it’s because insurance companies are pinching it so hard it hurts!

Cash and liquid funds are ordinarily “king” in any business, but the recent economic crunch has magnified by many times insurance company resolve to hold on to every dollar for as long as possible, no matter their obligations under the terms of policies with their policyholders.

Lawyers experienced in this field have found in the last year that claims which have been established to a point where they would have been settled in the past are now still being denied by companies who want to hold on to their dollars for as long as possible.

What this means to the disability claimant, at a bad time in his or her life because of being unable to earn income due to illness or injury, is that they now face a steeper hill to climb in dealing with their disability insurers because companies are doing everything they can to delay paying their policyholders for as long as they can.

For policies covered by ERISA, insurers have a built-in delaying mechanism with the discretionary clause which gives the administrator of the ERISA plan the authority to determine whether the claim is covered by the ERISA policy when the claim is first submitted.

It doesn’t take much imagination to conclude that the ERISA administrator, which many times is the insurance company which will have to pay the claim, will tend to protect its cash by denying the claim in the first instance and then to keep denying the claim to protect the insurance company’s cash reserves.

This right to determine a claim’s validity at its inception not only gives the insurer a leg up in the first instance but sets an impediment which the claimant has to overcome throughout the prosecution of the claim. The claimant is always playing second fiddle because the denial sets the tone for the case and must be overcome if the claimant is to prevail.

So, if you are being forced by circumstances to file a disability income claim, be prepared for more flak than insurers usually give such claims (and, believe us, it is usually plenty). But, you can’t wimp out and abandon the claim. That’s exactly what the insurer wants you to do.

If you have a valid claim, pursue it diligently and get the help you need from some one experienced in disability income insurance law and all of its pitfalls. (You can be certain that your insurance company and its cadre of attorneys know all of the pitfalls).

If you have a valid disability claim, be prepared for a longer, harder fight for benefits these days because of the recession. But, also know that you can win this fight!