Many policies of insurance contain exclusions for certain medical conditions, including conditions which pre-date the insurance policy. These exclusions, however, often have no effect if an intervening ailment is the true cause of the disability. For example, a policy may exclude a pre-existing heart condition. The insured, after purchasing the policy, may then suffer an infection or accident that further damages the heart. In such situations, coverage may exist.

What happens if the insurance company denies your claim and, because of financial hardship, you are forced to work either in your chosen field of medicine or in another? The answer is that being forced to return to work because of the insurance company's improper handling of your claim cannot be used as a defense so as to justify the denial of benefits. In other words, the insurance company cannot force you back to work and then use the fact that you are working to deny you disability benefits.

Under the law, an insurance company is obligated to investigate your claim reasonably and in a timely manner. Insurance companies must also give your interests and its interests equal consideration. In many instances, however, the insurance company may deny your claim out-of-hand without conducting any investigation whatsoever, hoping that you will simply drop your claim and go away. When later pressured, the insurance company may then perform a cursory investigation in order to obtain information that supports its denial. You, as the insured, may be obligated to cooperate with your insurance company and provide it with the information it requests. You may also even be asked to undergo an "independent medical examination," which is, incidently, an examination by a doctor chosen by the insurance company.

When making a claim for benefits under a disability policy, careful consideration should be given to the information that you provide to the insurance company, including any decision to submit to an "independent" medical exam. A coordinated effort should be undertaken, usually with the assistance of an attorney, in presenting your claim, providing subsequent information and, in many instances, detailing the law establishing your claim. This needs to be done in order for the insurance company to give your claim the consideration that it is due or, in some instances, to give the insurance company "enough rope to hang itself." In other words, you can build your case against the insurance company by providing it with information that will prove that its denial was unreasonable, and thus a breach of the insurance agreement, and constitutes bad faith.

A wrongful denial of a claim for benefits can expose the insurance company to damages in two ways. The first is a claim for breach of contract, and the second is typically referred to as a claim for "bad faith." In order to prove breach of contract, the insured needs to establish that he or she purchased the insurance from the company, that the insured is disabled, and that the company denied the insured's claim. In order to prove a bad faith claim, the insured needs to prove that the insurance company committed bad faith either by failing to conduct a reasonable investigation or by unfairly denying the claim.

Damages can be recovered for the policy benefits until the disability is removed or through age sixty-five, which is normally considered retirement age. In bad faith cases, the insurance company may be required to pay additional damages for such items as "pain and suffering" and the effect the denial of benefits may have had on the insured's credit. In some cases, punitive damages may also be awarded.

In conclusion, anyone who purchases disability insurance may be faced with a situation where the insurance company refuses to honor its commitment. The insured can then either abandon his or her claim, even though he or she has paid premiums to the insurance company, or the insured can insist that the insurance company honor its legal obligations by filing a lawsuit seeking damages for breach of contract and bad faith. Insurance companies are vigilant in protecting their own interests, which often means not paying claims. Insureds may often need to be even more vigilant in protecting their own interests.