Disability Insurer Profiles #10: Unum
Unum, originally called Union Mutual, was founded in 1848. Over the years, Unum has merged with additional companies such as Colonial Life and Provident (which had acquired Paul Revere) to form one of the largest insurance companies in America.[1] In 2017, Unum’s total revenue reached $11.3 billion, with total assets of $64 billion.[2]
In 2004, Unum was the subject of a multistate market conduct examination which identified the following inappropriate claims handling practices: (1) excessive reliance on in-house medical staff; (2) unfair evaluation of attending medical examiner notes; (3) failure to evaluate the totality of the claimant’s medical condition; and (4) an inappropriate burden placed on the claimants to justify eligibility for benefits. Following the 2004 investigation, Unum was required to reform its claims practices and pay a fine of $15 million. Unum was also required to reassess certain denied claims stretching over a seven year period. It is estimated that compliance with the settlement cost Unum around $120 million.[3]
If you are a dentist or physician with a Unum policy and are thinking about filing a disability claim, you should be prepared for an in-depth evaluation of your occupational duties. When a disability claim is filed by a professional, the amount of money at stake is significant. One way for the companies to save money is to deny the claim. Another is to maintain that the claim is not a “total disability” claim, but rather a “residual disability” claim, so they only have to pay a fraction of the full monthly benefit amount.
Whether a claim is a “total” or “residual” disability claim often come down to how the duties of your pre-disability occupation are defined in the context of your claim. Then, the insurer assesses whether it can argue that you can still perform any of those duties, taking into account what your medical records report regarding your limitations and any post-disability job or volunteer activities you may be engaging in. Even if your policy allows you to work in another occupation and still collect benefits, the insurance company may argue that your new job has overlapping job duties with your prior occupation, and therefore you are only partially disabled.
For example, in Ogborne v. Unum[4], a dentist filed a disability claim with Unum after suffering a ligament injury to his right index finger. His doctors told him that his injury would be slow healing, and eventually told him that his injury was permanent. Unum denied his claim, stating that he had given untimely notice of the claim and that the dentist was not “totally disabled” because his particular injury only prevented him from performing “two types of procedures.” Unum also relied on the fact that the dentist had returned to work and was making more money than he had before the injury.
The dentist and his attorneys sued to challenge the denial, and the court determined that Unum was improperly interpreting the definition of “total disability” under the policy, which defined “total disability” as “the inability of the Insured to perform the duties of his regular occupation.” The court observed that “[t]his definition is susceptible to two different, yet reasonable, interpretations: namely, that the insured is totally disabled if he cannot perform either more than one of his pre-injury duties or all such duties.” Then the court determined that the ambiguous language should be construed against Unum, as the drafter of the contract.
Next, the court determined that the dentist had, in fact, produced evidence demonstrating that he was unable to perform several of the duties of dentistry, including root canals, periodontal work, and root scaling. Ultimately, the court ordered Unum to overturn the denial, but it took several years and a favorable decision from a judge to get Unum to pay benefits.[5]
These are just a few examples of things to be aware of if you have a Unum policy or claim with Unum. Unum policies are not all identical, and they are updated frequently. Your policy may or may not include the provisions mentioned above. If you are considering filing a disability claim, you should consult with an experienced disability insurance attorney to learn more about your policy and any potential issues related to your particular claim.
[1] https://www.unum.com/about/corporate/history.
[2] https://investors.unum.com/Cache/1001235181.PDF?O=PDF&T=&Y=&D=&FID=1001235181&iid=103324.
[3] https://www.insurancejournal.com/news/national/2004/11/18/47854.htm.
[4] Ogborne v. UNUM Life Ins. Co. of Am., No. 3:04CV7231, 2006 WL 2505905, at *2 (N.D. Ohio Aug. 28, 2006).
[5] It should be noted that this particular case was also decided under Ohio law. As the law regarding how disability policies are interpreted varies from state to state, this case could have come out differently in a different jurisdiction.
