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Insurance is a valuable financial product, but it only works when it pays out your claims. In 2010, The New York Times found 1 out of every 14 health insurance claims is initially denied. In some cases, the health insurance company may consider a procedure experimental when your doctor believes it’s essential for your health and well-being.
Why should the insurance company get to decide?
An insurance lawyer can stand by your side and insist an insurance company pay for the benefits promised by your policy.
It’s not only private insurance companies that deny claims; the government regularly denies claims for Social Security Disability Insurance. From 1999-2009, the Office of Retirement and Disability Policy found 53% of disability claims were denied.
With both private insurance denials and Social Security Disability Insurance denials, the law guarantees you the right to an appeal.
A good insurance attorney could make the difference between another denial and a successful appeal.
Many insurance attorneys do not charge any upfront fees, and in many cases, you only pay the attorney if you win the appeal. In addition, that money may come out of your award settlement which means no out-of-pocket costs to you.
Finding an insurance or Social Security Disability lawyer is easy with LegalDirect.com’s service.
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Have you heard of ERISA?
If you’ve filed a claim for long term disability coverage through a private-sector employer, ERISA could have a major impact on your life.
It stands for the Employment Retirement Income Security Act of 1974, and it’s the federal law that regulates private-sector workplace retirement and health plans. While the law is intended to protect workers, it can actually make it more difficult to dispute a denied claim.
- You must follow your company’s internal appeals policy to the letter before you can take your dispute to the court.
- You may not have the right to a jury at trial once you do have a court case.
- You have a limited time frame in which to file appeals or you could lose your right to benefits.
For these reasons, workers may want an ERISA lawyer by their side to walk them through the process. An attorney can help you gather documents related to your claim, fill out paperwork and represent you in court once you exhaust the internal appeals process.
Why would you want to navigate a complex appeals process alone?
An ERISA lawyer can help.
In addition, ERISA lawyers may be able to help with other issues related to pensions, health insurance and 401(k) plans offered by private-sector (non-government, non-religious) employers.
If you’re a private-sector employee who’s been denied long-term disability or other benefits by your boss, talk to an ERISA attorney today for a free consultation.
Long Term Disability Claim Denial
When you buy insurance, you assume that you will be protected against loss – either from an injury or a catastrophic event. This is not always true. Often, insurance companies look for ways to deny claims, even if they don’t have a valid excuse for denying the claim.
This attempt to avoid paying justified claims is known as “bad faith.” When you buy insurance from a company, you put your faith in them. The breach of your trust and the betrayal in denying your claim for a false reason is bad faith.
Insurance Bad Faith Examples
Some examples of bad faith may involve a disability insurance company failing to investigate a claim, delaying claim investigations for no apparent reason, failing to provide payment on a covered claim, misrepresenting the meaning of the language of a contract.
Professionals and consumers who have been unfairly denied long-term disability benefits may be entitled to compensation. If your insurer has denied you benefits, contact us to learn your legal rights.
What is Long Term Disability Insurance?
Disability insurance covers you in case a sickness or injury prevents you from earning an income in your occupation. Disability insurance replaces 40 to 60 percent of an individual’s gross income, tax-free. The most common disability insurance policies require a 90-day waiting period from the onset of the disability, called the Elimination Period, before the individual can apply for disability benefits. An individual can choose a shorter Elimination Period; however, this increases the premiums on the policy. Elimination Periods can be as short as 30 days or as long as 720 days.
Once the Elimination Period has expired, the individual can apply for the disability benefits, provided that he or she is disabled under the terms of the policy. In general, disability insurance policies contain one of three definitions for disability.
“Own-Occupation Disability” defines disability as “The inability to perform the major duties of your occupation. The insurance company will consider your occupation to be the occupation you are engaged in at the time you become disabled. They will pay the claim even if you are engaged in another occupation.” This definition represents the broadest terms under which an individual can claim a disability. Under Own-Occupation Disability, an individual can continue to work in another occupation, provided that the sickness or injury prevents the individual from performing the occupation that he or she engaged in prior to the sickness or injury. Under this definition, the disability insurance insurer does not penalize the disabled individual for attempting to remain productive despite their sickness or injury.
The “Income Replacement” definition of disability has become the most common definition in the insurance market. “Income Replacement” defines disability under terms such as, “Because of sickness or injury you are unable to perform the material and substantial duties of your occupation, and are not engaged in any other occupation.” This definition still measures disability by the individual’s ability to perform the occupation he or she engaged in prior to the sickness or injury. The critical difference in this definition is that the insurer will reduce the disability benefit by any amount the insured earns in a different occupation. Therefore, if an individual who qualifies as disabled wishes to work, the insurer will reduce the benefits the disability insurance policies pays out by the amount that the individuals new job pays. By penalizing those individuals who choose to work, “Income Replacement” provides a disincentive for individuals to find work that they can perform after suffering from a disability.
Finally, the “Gainful Occupation” definition of disability usually appears in language such as, “Because of sickness or injury you are unable to perform the material and substantial duties of your occupation, or any occupation for which you are deemed reasonably qualified by education, training, and experience.” This definition of disability gives nearly complete discretion to an insurance company in determining whether an individual has a disability, because the types of occupations for which a person could “reasonably qualify” represents a broad range of occupations. While it is unlikely that an insurance company would require a dentist to work at a fast food restaurant, the use of the “Gainful Occupation” definition in a disability insurance policy makes it more likely that litigation will arise if an individual attempts to make a claim on a policy.
In addition to these definitions, many disability insurance policies identify “Presumptive” disabilities. Presumptive disabilities are a list of injuries that automatically qualify as disabilities, and usually includes the loss of hearing, sight, speech, or the use of any two limbs. The major difference between contracts is the use of the terms Total, Permanent, and Irrecoverable. Under a presumptive disability that requires total loss, an individual is protected when they lose total loss of sight, hearing, speech, or use of two limbs, even if that loss is only temporary. Under the permanent and irrecoverable loss definition of presumptive disabilities, temporary losses of sight, hearing, speech, or use of two limbs are not covered. The distinctions in definition help to determine the utility of the presumptive disability clause to individual disability insurance policyholders.
The majority of litigation concerning disability insurance policies focuses on the definition of disability. For this reason, it is important that an individual understand the terms of a disability insurance policy and select the policy that best serves his or her needs. Such diligence, however, cannot prevent all litigation from occurring. As such, it may help to understand the basis under which people litigate most disability insurance claims.
If you are the victim of a long term disability claim denial, contact LegalDirect.com to be connected with a lawyer that wants to help.