A disability insurance company’s decision to terminate your claim can be traumatizing and infuriating. In short, the company that you placed your trust and financial well-being, as well as thousands of dollars in premium payments, is now alleging that you are no longer disabled and capable of returning to work. These companies findings often contradict the opinions and clinical assessments of your treatment team, which the company previously relied upon to accept liability. However, it is important to know that a claim termination does not mean that you are no longer entitled to benefits under the policy.
Insurance companies are for profit businesses. Their goal is to maximize profits by limiting liability. By terminating your claim, your insurance provider is able to reduce their reserve and reduce their financial liability. The termination and removal of the reserve allows the company to transfer the funds obligated to support your claim back into its profit margins.
Disability insurance companies conduct actuarial studies and are well aware of the percentage of insureds that simply walk away from their claim upon receiving a termination letter. If your claim was terminated, your insurance provider is hoping you choose to do the same.
As such, it is important that you act promptly to understand the basis of your insurance company’s termination. A disability insurance claim, like any other insurance claim, is governed by the terms, conditions, and limitations of your policy. These provisions provide the rules that both you and the insurance company are required to follow during the claims process.
When a disability insurance provider terminates a claim for disability insurance benefits, they are required to provide a reasonable explanation for their determination. This explanation should contain an overview of the contractual and factual basis relied upon by the insurance provider to deny liability. If your insurance provider failed to provide a reasonable explanation for the claim denial, it may be in violation of your state insurance regulations and you should send a formal letter requesting the same.
The company’s position letter is important because it will outline the contractual and factual basis for the termination your claim. At Seltzer & Associates, we start every review of our client’s claim by analyzing their policies and the termination letter. We scrutinize the information their insurance company relied upon to terminate liability. We establish a detailed plan with our clients and work to obtain the strongest evidence to best substantiate their claim. While gathering this additional documentation, we also analyze and outline the deficiencies in the company’s claims determination. Upon completion of this review, we present our clients with the option to submit a voluntary appeal, engage in pre-suit mediation or litigation.
Most insurance companies offer their insureds a voluntary appeal, rather than immediately entering into costly litigating. The appeals process is generally the most cost effective means of overturning a claims termination.
The Appeals Process
A voluntary appeal is often the most time- and cost-effective means to reverse your individual disability insurance claim termination. Unlike ERISA governed claims, which require the submission of an appeal, most individual disability insurance companies offer claimants a voluntary appeal rather than compelling litigation. Even if the denial letter does not advise of this option, our law firm will communicate directly with the insurance company to have the claim re-evaluated.
Individual disability claims are generally more complicated than claimants anticipate when they submit a claim. Claimants are easily overwhelmed by the disability insurance company’s requests for medical, financial, and occupational documentation. Claimants are unaware their disability insurance company employs a team of in-house medical, occupational, vocational and financial consultants to perform its claim reviews. These consultants are well trained and look to exploit any deficiency in the information provided by a claimant in the company’s best interest.
Unfortunately, most claimants lack the knowledge and resources to challenge the insurance company. At Seltzer & Associates, we work with our clients to obtain the necessary documentation to fully evaluate and most strongly substantiate their claim. During this process, we breakdown every aspect of the claim, including the medical, financial, and occupation information submitted to the company. We work to obtain all necessary medical documentation and, when necessary, we retain the experts necessary to best substantiate our clients claim.
Our legal team uses the appeal process to supplement the insurance company’s claim file and to put the disability insurance company on notice of the issues that will be litigated should it fail to reverse its position. We may outline the deficiencies in the company’s review, including contractual and legal issues relevant to each claim. Upon submission of the appeal, we engage in an open dialog with the company to help expedite their review and obtain the most a favorable result for our clients.
Mediation is another option we can pursue on our clients behalf to resolve a claim without filing a lawsuit. Typically, mediation is pursued when an appeal is not warranted or the company’s adverse decision has been upheld. Mediation consists of both parties presenting their positions before a mediator, a neutral third party. We carefully screen and select all mediators to ensure they have the knowledge and experience to provide a full and fair review of our client’s claim.
Often times, even after we have filed a lawsuit and are involved in litigation on a case, there will be an opportunity to enter mediation. This can come by agreement between all parties or at the direction of the presiding judge.
At mediation, we walk through the issues of our client’s claim with the goal of persuading the disability insurance company to reverse its position or to obtain a favorable resolution acceptable to our client prior to filing a lawsuit.