Life Insurance Dirty Tricks

Would you believe that insurance companies withheld $1 billion in death benefits from beneficiaries of life insurance policies? If your answer is “No”, think again, according to an advanced story in TODAY about a Consumer Reports article to be published this month.

This finding of insurance company cheating doesn’t surprise us, but the amount is staggering.

Life insurance companies had their own version of “Don’t Ask, Don’t Tell” when it came to informing beneficiaries of policy benefits when an insured died. If a beneficiary didn’t know about the policy or about the insured’s death, the insurance company wouldn’t tell.

More than that, some companies, even knowing that their insured had died, not only didn’t inform the policy beneficiaries, they continued to charge the policy with premiums they knew couldn’t be paid until the policy ‘s cash reserves were drawn down before canceling the policy.

Now that practice has stopped in those states that called the insurance companies on it. Not only did the companies have to pay a fine, they also had to install systems which would be likely to see to it that beneficiaries were informed and paid when an insured died.

It’s not that insurance companies did not have a resource for learning when a policyholder died. The Master Death List of the Social Security Administration is open to them and they used it willingly to locate annuitants that had died so that they coukld stop paying annuities. But, they didn’t use the same information to notify beneficiaries of policyholder’s death. SHAME ON THEM!

To avoid any of these insurance industry shenanigans, everyone who takes out a life insurance policy should let the beneficiaries know about it. It is not necessary to know the amount, but beneficiaries should know there is a policy, the name of the insurance company and how to reach the company in the event of death.

If you can do it tactfully enough, you might want to mention this life insurance dirty trick to an older friend or relative who might have a policy. This will suggest that they give the necessary policy information to their beneficiaries if they haven’t already done so.

Insurance companies fight tooth and nail to keep from paying benefits.

Let’s not make it easier for them.

Being Human In The Doctor's Office

A recent post about an upcoming book got us thinking again about the relationship between doctors and patients, especially when a disability income claim is involved. DI claims require doctors to do more than just treat the patient. They must also be aware of the requirements of the patient’s occupation and have an opinion about how the patient’s illness or injury affects the ability of the patient to perform the duties of that occupation.

The post in Kevin Pho’s medical blog discussed how patients should conduct themselves in doctor’s offices with both the doctor and the doctor’s staff.

To sum it all up in two words: Be Nice. After all, it’s obvious to most of us that one of the last places we want to be disliked is a place where our health and well-being someday may be on the line.

One of the most potent paragraphs in the post was “Remember That Doctors Are Human Beings”. The paragraph went on to point out that doctors have personalities, families, feelings, good days, bad days, and social lives. Because of their duties, they often miss their kids’ soccer game, parent-teacher meetings, their own medical appointments and many social events that the rest of us take for granted.

So, Be Nice!

But, being nice is a 2-way street. The doctor and his staff should also be nice to patients, especially a disability income insurance patient who is probably battling a monster insurance company with no income and an uncertain working future.

Doctors are used to making reports about a patient’s medical condition and sometimes offer a prognosis which they and their patients believe to be reasonable, both of them understanding that prognoses are just educated guesses.

But, when reporting to an insurance company on a disability insurance claim, more care is required. A physician’s informed guess will become the law of the claim, if it suits the insurance company’s interests and that guess will be used against the patient’s interests no matter what the doctor says about the patient’s actual condition thereafter.

What we mean to say here is that doctors have to be careful about what they say to insurance companies when reporting on a patient’s condition or prognosis. Physicians have to understand that an insurance company is looking to find a way NOT to pay on its policy. With that thought in mind, doctors can see how important their reports are in a claim based on physical or mental disability.

Insurance companies have a natural tendency to think that all disability income claimants are “dogging” it. It is part of the insurance industry culture. So, we can see that if a disability end date is predicted by a physician and it doesn’t work out that way, the patient is stuck with the prediction because the insurer will be sure throw it up at every stage of the proceedings.

One trick insurers have is putting a small date box for the answer to the question of when a patient will be able to go back to work. Most physicians assume the company wants their best estimate if things go normally, so they answer with just a date in the form the box allows. Truth is, though, the insurer just wants a date so that if things don’t go normally and the patient still can’t work when the date passes, the insurance company can turn the screws on the patient by throwing the date up to the patient time and time again in the claims battle.

Patients should treat doctors and their staffs as human beings because they are and have the same needs as we do.

Likewise, doctors should know that insurance claimant patients are usually in the fight of their lives with insurance companies. They need to take the extra time and care to provide complete and accurate medical information, indicating clearly that they don’t know the answer to a question if they don’t.

Loose lips sink ships. They can also sink a patient’s legitimate disability claim.