Disability Insurance Claims: Protecting Your Asset (Part I)

Sep 13, 2005 - Publications by

Editors Note: This is Part I in a two-part series.

As a chiropractor, engaged in the active practice of chiropractic, you are customarily used to routinely dealing with insurance carriers considering payment of your bills for professional services rendered. However, what you probably haven’t been exposed to is trying to get paid by your disability insurance company. The latter, is not only a totally different situation, but it comes at a time when you are most vulnerable and most in need of these insurance proceeds. While your years of training and developing your expertise in chiropractic have taught you how to be successful from a professional and financial stand point, it has not taught you how to maintain your lifestyle and support your family in the event of disability. This two-part series will provide you with valuable basic information and knowledge about protecting one of your most valuable assets if you become disabled: your disability insurance benefits.


By the 1980’s there was head-to-head competition between major disability insurance companies competing for, what was perceived to be, the best potential market: healthcare professionals. Companies liberalized contract language and expanded benefits in order to gain market share. However, by the 1990’s claims on those liberalized policies began to dramatically increase, causing the Companies to lose money on their disability lines. In response, the companies took drastic steps to reduce their liabilities. Many companies, previously writing these policies, sold those blocks of business or merged with other companies causing major consolidation with few companies now controlling this market. In addition, the remaining companies began to look at claims with a “hard-line” attitude and began developing sophisticated strategies implemented in the claims process to lessen their liabilities.

Therefore, if you are either on claim, or considering filing a claim, it is now, more than ever, important for you to have a full understanding of your contract and the relevant legal issues and strategies that will be raised or implemented by your disability insurance company, in considering your claim.


Essentially, there are two types of policies under which you, the disabled chiropractor, may look for benefits. The first is the group, or long term disability policy. LTD policies are usually governed by the Employee Retirement Income Security Act of 1974 (ERISA). LTD policies are also generally part of an employee benefit plan, provided through hospitals, learning institutions or large group practices. LTD policies are more restrictive than individual disability income policies, and contain contract language geared toward limiting benefits. LTD policies and ERISA set forth a specific procedure to be followed in filing a claim, and in appealing an adverse decision by the company.

Most typically, chiropractors are insured by their own individual disability income policies. DI policies, especially those issued in the 1980’s and early 1990’s, generally provide far superior coverage when compared to LTD policies. DI policies also contain a procedure to be followed in filing a claim. This process is much more complicated than it appears in view of the “minefield” of issues, strategies and case law that must be considered when trying to obligate your disability insurance company to pay you benefits. You must understand that every piece of information, either submitted by you to, or developed by, the Company will be scrutinized by its claims department and it’s forensically trained staff of consultants and “experts,” skilled and experienced in looking for ways to defeat your claim.

Remember, your disability insurance income policy is a contract. You need to have a full understanding of your policy. You need to satisfy all pertinent policy provisions in order to obligate your company to pay you benefits. You also need to understand the uniqueness of these contracts. At the very time that you are suffering from a condition, or conditions, that rise to the level of severity, so as to disable you, and when you are often faced with multiple other problems flowing from your health, including financial, professional and family matters, you need to prove that you satisfy this contract language every single month that you are on claim.


Total Disability – Usually defined as the inability to perform the material and substantial or important duties of your own occupation. The company will conduct an occupational assessment to determine what is your “own occupation” or “occupations” in which you are engaged at the time that you become disabled. They will look at every aspect of activity conducted in the course of your practice. In addition, the second component requires physician’s care. “Physician” is usually generic. The level of care varies by policy and is very specific, ranging from regular care to care which is “appropriate” for the condition causing the disability. Both components must be satisfied.

Residual Disability – or “Partial Disability” is usually defined as the inability to perform one or more of the material and substantial, or important duties of your own occupation, or the ability to perform all those duties, but for less time than prior to the onset of disability. In addition, you must suffer a loss of income, which is generally 20%, compared to your pre-disability income, as a result of your disabling condition. Also, you must satisfy the physician’s care requirement.

Pre-Existing Condition – Is a condition which existed prior to the effective date of the policy, and was either not disclosed or misrepresented on the application for the policy. It is often defined by whether or not you had actually received treatment and care for the non-disclosed condition, or whether the reasonably prudent person would have received treatment and care for the condition. If you become disabled as a result of a pre-existing condition, the company will attempt to exclude this condition from coverage.

Incontestability Clause – Is a clause contained in the policy which usually prevents the company from contesting your policy after it has been in effect for two years. There are essentially two types of incontestability clauses. In the first type, more typically contained in older policies, the company cannot contest the policy after it has been in effect for two years. Sometimes, there is a provision which excludes any period of disability during the two year contestable period. In the second type, the company retains its ability to contest the policy after two years, if in the event the application for the policy contains “fraudulent misstatements”. Needless to say, there is a big difference between a misstatement and a fraudulent misstatement. However, if the company can prove that a misstatement rises to the level of fraud, it can take action by either attempting to void the policy by way of rescission or denying the claim.


Now that you understand the playing field and some of the major contract provisions, it is time to understand some important defenses and strategies that will be employed against you after filing your claim. In next month’s FYI, I will continue with these important topics.


The Law Firm of Mark F. Seltzer & Associates, P.C. nationally represents Chiropractors, Physicians, Healthcare Practitioners and Professionals in disability insurance claims and cases. The firm can be contacted at: 888-699-4222 or at www.seltzerlegal.com.