You’ve made the difficult decision to give up practicing and file a claim. You’re not working and you need to collect the disability benefits you’ve likely paid years of high premiums for. So how long will you have to wait until your first benefit check arrives?
Unfortunately, the answer is not clear cut—it depends on the terms of your policy, your insurance company, the assigned benefits analyst, and the complexity of your claim, among other things.
Filing a Claim
Your policy should outline the requirements for filing a claim. Typically, you must give notice of your claim to your insurer within a certain time frame. If you miss this important deadline, the insurance company will typically claim that you have prejudiced its ability to investigate your claim, and use this as an excuse to delay making a decision on your claim. Significantly, if you don’t provide timely notice, it can also foreclose your ability to collect benefits (depending on the circumstances, and the reason for the delay).
Once you file your claim with your insurer, they will then send claim forms to be completed by you and your physician. Your policy should include a deadline for when your insurer must provide you with these forms (e.g. 15 days). If they don’t provide you with forms within this time frame, most policies allow you to submit a written statement documenting your proof of loss, in lieu of the forms. Again, there is a deadline to return these forms and failing to do so gives your insurer an excuse to prolong the decision-making process.
Elimination and Accumulation Periods
Your policy will also contain details about your elimination period. This is the period of time that must pass between your disability date and eligibility for payment on a claim. Generally, you must be disabled (as defined in your policy) and not working in your occupation during this time period.
Depending on the terms of your policy, this period does not necessarily have to be consecutive, but it does need to occur within the accumulation period also set out in your policy (for example, your policy might require a 90 day elimination period that must be met within a 7 month accumulation period). You will not be eligible for payment until the elimination period has been fulfilled. Typically, insurers won’t provide you with a claim decision until after this date has passed.
It is important to be aware of your elimination period, so that you can plan accordingly (and are not expecting a benefit payment to arrive right way when you are budgeting to meet living expenses, or debts like student loans). Also, it’s important to keep in mind that receiving a benefit payment immediately following the elimination period is the ideal scenario. In many claims, it takes much longer for a benefit to be issued. In our next post, we will address some of the most common reasons benefit payments are delayed.
If you are thinking about filing a disability claim, you are likely wondering whether you will be able to meet your monthly expenses if you’re no longer able to work. You may have made a list of your necessary expenses, and likely included your disability insurance premium payments on that list, as your agent likely told you that your policy would lapse and you would lose your coverage if you missed a premium payment. At this point, you probably started to wonder whether you still have to keep paying the premium after you file the claim, and if so, for how long?
The answer depends on the specific terms of your policy. The paragraph that you’ll want to look for when you’re reviewing your policy is typically titled “waiver of premium,” but some policies address waiver of premiums as part of a larger section of the policy that discusses premiums more generally.
How Do Waiver of Premium Provisions Work?
Generally speaking, waiver of premium provisions state that your insurance company cannot charge premiums during periods of time when you are disabled. A waiver of premium provision typically will also require your insurance company to reimburse you for premiums you have previously paid during your period of disability (i.e. the premiums that you paid while the insurance company was investigating your claim).
Waiver of premium provisions are included in most disability insurance policies. If you are considering purchasing a policy that does not include a waiver of premium provision, you may have the option to purchase a waiver of premium rider.
Here is an example of a waiver of premium provision from an actual disability insurance policy.
Under this policy, the waiver of premium provision requires you to pay premiums either for 90 consecutive days after you become disabled, or until the end of the elimination period (the elimination period is the number of days you must be disabled before you are entitled to benefits, and is usually noted on the first few pages of a policy).
So, for example, under this policy, once you have been disabled for 90 consecutive days, you no longer would have to pay premiums (at least until you recover from your disability, or your insurer terminates your benefits). You also would receive a refund of any premiums that you paid for any period prior to your date of disability.
Notably, the waiver of premium provision above also requires you to be receiving benefits for the waiver to apply. This is significant because, depending on the terms of your policy, in some cases you could be disabled but not receiving benefits. For instance, your policy might have a foreign residency limitation that prevents you from receiving benefits if you are living in another country, even if you remain disabled. In such a case, you might have to resume paying premiums until you returned to the United States in order to keep your coverage in force.
Timely and proper payment of premiums is critical, as a failure to pay premiums can result in you losing your disability coverage completely. It is important to read your policy carefully so that you have a clear understanding of when you are required to pay premiums, and when you are entitled to a refund of past premiums.
Most insurance companies will provide you with written confirmation that premiums have been waived, and it is best to keep paying your premiums until you receive this written confirmation, even if you think that you no longer have an obligation to pay premiums under the terms of your policy. If you have questions about whether your insurance company should have waived and/or refunded premiums under the terms of your policy, an experienced disability insurance attorney can review your policy and explain your rights and obligations under your particular policy.
The answer depends on what your disability policy says. Many people don’t realize that their policy may limit their ability to receive disability benefits if they move out of the country. If you’ve ever wondered why claims forms ask for your updated address, one of the reasons might be that your policy contains a foreign residency limitation, and your disability insurance company is trying to figure out if they can suspend your benefits.
Foreign residency limitations allow disability insurance companies to stop paying benefits under your policy if you move out of the country. These limitations may be especially relevant if you have dual citizenship, you want to visit family living abroad, or you plan to obtain medical care in another country. A foreign residency limitation may also affect you if your policy allows you to work in another occupation and you have a job opportunity in another country that you want to pursue. For instance, if you are a dentist and can receive disability benefits while working in another occupation, your insurance company may suspend your benefits if the opportunity you pursue is in another country.
Foreign residency limitations benefit disability insurance companies in several ways. By requiring you to remain mostly in the country while receiving benefits, these limitations simplify the payment process and reduce the possibility that insurers will need to communicate with doctors in other countries to manage your claim. They also make it easier for insurance companies to schedule field interviews and conduct surveillance of you to find out if you have done something that could be interpreted as inconsistent with your claim.
While these limitations are not included in every disability insurance policy, it is important to check if your policy—or a policy you are considering purchasing—contains a foreign residency limitation, because it could limit your ability to collect benefits later on.
Foreign residency limitations vary by policy. Here is an example of one foreign residency limitation from a Guardian policy:
This limitation highlights several details you should look for if your disability policy contains a foreign residency limitation, including the length of time you can spend in another country before your insurance company will suspend your benefits, whether you can resume receiving benefits if you return to the country, and when you will have to resume paying premiums if your insurance company suspends your benefits. Another important consideration is the effect a foreign residency limitation will have on your policy’s waiver of premium provision. Under the policy above, premiums will continue to be waived for six months after benefits are suspended. However, your policy may have a different requirement regarding payment of premiums, so it’s important to read your policy carefully.
Here is an example of another foreign residency limitation from a different Guardian policy:
This limitation contains much less detail than the first limitation. For instance, it does not clarify how suspension of benefits will affect waiver of premium. If your disability policy contains a foreign residency limitation that does not discuss waiver of premium, you should look to your policy’s waiver of premium provision to find out when premiums will become due after benefits are suspended. The policy above also defines foreign residency differently than the first policy. At first glance, it may seem that you can continue to receive disability benefits any time you leave the country for twelve months or less. What the policy actually says, though, is that the insurance company will only pay benefits for twelve months that you are out of the country at any time you are covered by the policy. So, if you have received benefits for twelve months while living in another country—even if those months were spread out over several years—your insurance company will not pay benefits in the future unless you are in the United States or Canada.
As you can see, foreign residency limitations vary among disability policies. If you are thinking about leaving the country, it is important to read your policy carefully first so that you understand how leaving the country may affect your ability to recover benefits.
You spent years in school and invested countless hours to establish and maintain your practice. You even protected this investment by purchasing a disability policy. Yet, if you do become disabled and make a claim, your insurer might still make the argument that you are only trying to retire and get paid for it. Unfortunately, disability insurance claims by doctors and other healthcare professionals are especially targeted for denial or termination.
When you are disabled and are no longer able to practice in your profession, it may seem logical to simply refer to yourself as “retired,” especially if you are not working in another capacity. While it’s certainly understandable that you may not want to explain to everyone who asks why you’ve hung up your lab coat, you need to keep in mind that innocently referring to yourself as retired will likely prompt your insurer to subject your claim to higher scrutiny. Insurance companies often attempt to take statements out of context in order to deny or terminate benefits by alleging that a legitimately disabled claimant is:
- Making a lifestyle choice.
- Unmotivated by or unsatisfied with work.
- Embracing the sick role.
Remember, in the insurance company’s mind, there is a big difference between “disabled” and “retired.” Below are some common situations where you should avoid referring to yourself as retired:
- When asked for your profession on claim forms.
- When talking to your doctors or filling out medical paperwork.
- On your taxes, other financial forms, and applications.
- Around the office.
- At social functions or gatherings.
- On social media.
Insurers can—and often do—employ private investigators to follow claimants on social media; interview staff, family, or acquaintances; and track down “paper trail” documents (such as professional license renewal forms, loan applications, etc.) to see if you have made any statements that could be construed as inconsistent with your disability claim. Insurers also routinely request medical records and may even contact your doctor(s) directly regarding your disability. So, for example, saying something off-hand or even jokingly, such as “I’m retired—I can stay out as late as I want now!” to your doctor, or at a social event like a block party, could lead to your insurer trying to deny your claim if they later spoke to your doctor or your neighbor.
While the focus of your claim should be on your condition and how it prevents you from working, insurance companies can latch on to innocent statements like this in an effort to deny legitimate claims. Eschewing the word “retirement” is a good and easy first step to help avoid unwanted and unwarranted scrutiny from insurers.
Ed Comitz’s Continuing Education course “Disability Insurance Roulette: Why is it So Hard to Collect on My Policy” is now available through Dentaltown. This CE is an electronically delivered, self-instructional program and is designated for 2 hours of CE credit. In this course, Ed discusses why it is so difficult for dentists to collect disability benefits and how to avoid the most common mistakes made by dentists when filing disability claims. Ed also covers the key provisions to look for in disability insurance policies and provides an overview of the disability claims process. Finally, the course discusses how disability insurance claims are investigated and administered, and identifies common strategies used by insurance companies to deny claims.
Information on how to register can be found here.
For more information regarding what to look for in a policy, see this podcast interview where Ed Comitz discusses the importance of disability insurance with Dentaltown’s Howard Farran.
Disability insurance companies are constantly searching for new ways to expand the power and control they have over their policyholders through the use of restrictive policy provisions. In previous posts we’ve discussed how disability insurers are expanding their control over their policyholders’ medical treatment by implementing more stringent care provisions. However, care provisions are not the only avenue for disability insurers to exert a greater degree of influence in the claims process. Over the years, insurers have also expanded the scope of their authority under examination provisions.
The most basic examination provisions simply notify the policyholder that he or she may be examined by the insurer’s doctor or interviewed by a representative of the insurer, like this policy from Northwestern Mutual:
- Medical Examination. The Company may have the Insured examined by a health care practitioner.
- Personal Interview. The Company may conduct a personal interview of the Insured.
- Financial Examination. The Company may have the financial records of the Insured or the Owner examined.
Taken alone, this does not seem to onerous. However, you need to watch out for additional requirements buried at the end of the provision:
Any examination or interview will be performed:
- At the Company’s expense;
- By a health care practitioner, interviewer or financial examiner of the Company’s choice; and
- As often as is reasonably necessary in connection with a claim.
The final sentence of this provision leaves the open the possibility of multiple interviews throughout the claim, and may be overlooked by a claimant who does not carefully review his or her policy.
Other provisions, like this medical examination provision from a Standard Insurance Company individual disability insurance policy, expressly condition the payment of benefits on your cooperation with the exam:
MEDICAL EXAM – We can have Physicians or vocational specialists examine You, at Our expense, as often as reasonably necessary while You claim to be Disabled. Any such examination will be conducted by one or more Physicians or vocational specialists We choose. We may defer or suspend payment of benefits if you fail to attend an examination or fail to cooperate with the person conducting the examination. Benefits may be resumed, provided that the required examination occurs within a reasonable time and benefits are otherwise payable.
In newer policies the language used by the disability insurance companies has become ever more burdensome. For instance, some modern provisions for examinations and interviews create far more specific duties for the policyholder and condition the payment of benefits on the claimant’s satisfaction of these duties. Take this Guardian policy, for example, which outlines the policyholder’s duties and obligations to comply with examinations and interviews in very specific language:
We have the right to have You examined at Our expense and as often as We may reasonably require to determine Your eligibility for benefits under the Policy as part of Proof of Loss. We reserve the right to select the examiner. The examiner will be a specialist appropriate to the assessment of Your claim.
The examinations may include but are not limited to medical examinations, functional capacity examinations, psychiatric examinations, vocational evaluations, rehabilitation evaluations, and occupational analyses. Such examinations may include any related tests that are reasonably necessary to the performance of the examination. We will pay for the examination. We may deny or suspend benefits under the Policy if You fail to attend an examination or fail to cooperate with the examiner.
You must meet with Our representative for a personal interview or review of records at such time and place, and as frequently as We reasonably require. Upon Our request, You must provide appropriate documentation.
Examination provisions containing language this specific and this restrictive significantly limit your rights. The most significant change in the evolution of the examination provision is the number of obligations upon which your benefits are conditioned. This policy language allows disability insurers to use your benefits as leverage to compel your compliance with medical exams, interviews, and a litany of other examinations.
Review your disability insurance policy, and particularly your examination provisions in the “Claims” section, to determine what your rights, duties, and obligations are under your policy. Unfortunately, if your policy requires to participate in examinations, a refusal will likely lead to a denial of benefits. However, you do not have to attend alone. No matter how restrictive the language in your disability insurance policy, you always have the right to have an attorney present for any examination or interview. If you have any questions about your duties or obligations under your policy, contact an experienced disability insurance attorney.
Provisions Appearing As Policy Terms or As Riders (2 of 2)
In this series of posts we are discussing policy riders, the add-ons to your basic disability insurance policy that provide additional terms or benefits in exchange for higher premiums. In part one, we walked through the basics of policy riders and evaluated the commonly-purchased COLA rider. In part two, we analyzed two benefit-based riders that enable you to increase your monthly benefits without the hassle of applying for additional coverage.
In the part three, we looked at a pair of provisions that may appear as policy terms or as riders, depending on the insurer. Some of these provisions can have a significant effect on your rights and benefits in the event of a disability, and identifying where and how they may fit into your policy is critical to ensuring you are fully protected. In this fourth post, we’ll look at two more provisions that sometimes appear as policy terms and sometimes appear as riders, depending on the insurer.
On this blog we have spent a significant amount of time writing the importance of purchasing an individual disability insurance policy to that defines “Total Disability” in terms of your own occupation, rather than any occupation. This is especially true for doctors, dentists, and other highly specialized professionals who have invested years of time and hundreds of thousands of dollars in their careers.
To determine if you have an own occupation policy, look under the “Definitions” section of your policy for the definition of “Total Disability”:
Total Disability or Totally Disabled means that, solely due to Injury or Sickness, You are not able to perform the material and substantial duties of Your Occupation.
Your Occupation means the regular occupation in which are engaged in at the time you become disabled.
This is a typical own occupation definition of Total Disability. If your policy does not define total disability in terms of Your Occupation, Your Regular Occupation, Your Current Occupation, or similar language, it is unlikely that you have an own occupation policy. If that is the case, you may nonetheless be able to purchase an own occupation rider. An own occupation rider will likely come with a significant premium increase, but for most medical professionals the high cost is justified by the additional income security the provision provides.
Most modern-day disability insurance policies pay benefits until the policyholder reaches age 65, though in some unique cases a standard policy may pay lifetime benefits. More often, however, a lifetime benefits provision must be purchased as a policy rider. The provision usually includes language stipulating that the disabling condition must occur before a certain age (typically between 45 and 55) in order for the policyholder to be eligible for lifetime benefits at 100% of their monthly benefit. If the condition occurs after the cutoff age, the policyholder will only be paid a percentage of their monthly benefits for the remainder of their lifetime. For example, the provision may structured as follows:
Lifetime Benefit Percentage is determined based upon the following table:
If Your continuous The Lifetime Benefit
Total Disability started: Percentage is:
Prior to Age 46 100%
At or after Age 50, but before Age 51 75%
At or after Age 55, but before Age 56 50%
At or after Age 60, but before Age 61 25%
At or after Age 64, but before Age 65 5%
At or after Age 65 0%
A lifetime benefit extension rider can be enormously advantageous if you become disabled prior to the cutoff age. However, as you can see from the table, it can also have rapidly diminishing returns if you become disabled later in life, depending on your policy’s terms.
In the last post of this series on disability insurance policy riders, we’ll be taking a look at some of the more recent policy rider products disability insurance companies are offering to the next generation of professionals, such as the student loan rider.
Benefit Increase Riders
In the first post of this series, we introduced you to disability policy riders and discussed a common rider designed to help protect your benefits from a fluctuating economy. Policy riders can be useful for protecting your growing income as well, and we continue this with an evaluation of two riders intended to ensure that your monthly benefits remain in alignment with your current income and lifestyle.
The vast majority of doctors and dentists will experience significant increases in income as their careers develop. If you are a dentist who purchased a disability policy right after graduating from dental school, it is likely that after ten or twenty years there will be a significant difference between your current monthly income and your monthly benefits under your policy.
If debilitating carpal tunnel syndrome forces you to stop practicing dentistry, the basic terms of your policy will not cover the gap between your monthly benefits and your current income. The automatic benefit increase rider and the future increase option rider are designed to fill that gap in different ways. However, both are intended to ensure that in the event of a disability, your benefits will be sufficient to cover the monthly expenses associated with your current lifestyle.
Automatic Benefit Increase Rider
The automatic benefit increase rider adjusts your monthly benefit on an annual basis to account for anticipated increases in income after you purchase your policy. The annual increases are typically for a term of five years, after which you will generally be required to provide evidence of increased income in order to renew the rider. If you renew the rider, it often includes a corresponding premium increase as well. A typical automatic benefit increase schedule looks like this:
|Increase Date||Monthly Benefit Increase||Annual Premium Increase|
|December 12, 2003||$500.00||$74.16|
|December 12, 2004||$500.00||$75.82|
|December 12, 2005||$500.00||$77.52|
|December 12, 2006||$500.00||$79.18|
|December 12, 2007||$500.00||$80.88|
An automatic benefit increase rider can help ensure that your monthly benefits adjust to compensate for increases in income throughout your career. If you are purchasing a disability insurance policy and you are concerned with maintaining your lifestyle in the event of a disability, you may consider adding an automatic benefit increase rider to your policy.
Future Increase Option Rider
This policy rider guarantees you the right to purchase additional coverage at predetermined dates in the future without going back through the long and tedious process of reapplying for a policy. Additional coverage purchases are typically limited to half the original benefit amount, and most insurers will not let you purchase this rider after age 45. The increase in your premiums will often be a function of the amount of additional coverage purchased and your age at the time of the purchase. This future income option rider was taken from a standard Unum policy:
You may apply for up to one Unit of Increase as of any Option Date. You may apply for part of a Unit of Increase as of any Option Date.
If all or part of a Unit of Increase is not used as of an Option Date, You may carry it over and apply for it on the next Option Date. But You cannot carry it over beyond that Option Date.
On the first Option Date, You may also apply for up to one additional Unit of Increase if You are not disabled. But You must also exercise all of Your current Unit of Increase. This additional Unit of Increase cannot be carried over.
In no event may You exercise more than two Units of Increase as of any Option Date. To use all or part of a carried-over Unit of Increase You must also exercise all of Your current Unit of Increase. The total number of Units of Increase exercised can never exceed the maximum number of Units of Increase shown on the policy schedule.
If You qualify, We will increase Your Policy Benefit by the amount for which You apply.
Like the automatic benefit increase rider, this option helps ensure that your monthly benefits are proportionate with your current income. As such, if you elect to purchase additional coverage you may be required to show that your current level of income warrants additional coverage.
The future increase option is one of the most common and most popular policy riders, and it is cheaper than the automatic benefit increase rider because all you’re paying for is the right to purchase additional coverage. Keep in mind, however, that the value of that right is the guarantee of your ability to increase your coverage regardless of subsequent changes in your disability risk factors.
Before you purchase an individual disability insurance policy, take the time to evaluate your financial goals and look carefully at the benefits provided by the basic terms of the policy you are considering. If the policy basic policy benefits do not cover your needs, you may consider adding one of these riders to ensure your investment in your career is fully protected. In our next post in this series, we will discuss provisions that may appear either in the basic terms of your policy or as a policy rider and how to identify them.
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 4
Care Dictation Provisions
Throughout this series of posts we’ve addressed the increasingly restrictive medical care provisions in disability insurance policies. In Part 1, we discussed the evolution of the care standard and its effect on an insured’s ability to collect benefits and control their own medical treatment. In Part 2 we looked at the “regular care” standard, which places no obligation on the insured to undergo any unwanted medical treatment. In Part 3 we looked at the “appropriate care” and “most appropriate care” standards, which require much more vigilance on the part of policyholders, because they must be prepared at any time to establish that the treatment they are receiving is justified under the circumstances. In this final post, we are going to look at the most aggressive and intrusive language that has been adopted by insurance companies in an effort to dictate the care of their policyholders.
Here is an example of a very strict care provision, taken from a Great West policy:
Regular Care of a Physician means personal care and treatment by a qualified Physician, which under prevailing medical standards is appropriate to the condition causing Total Disability or Residual Disability. This care and treatment must be at such intervals as will tend to lead to a cure, alleviation, or minimization of the condition(s) causing Total Disability or Residual Disability and which will lead to the Member’s return to the substantial and material duties of his own profession or occupation or maximum medical improvement with appropriate maintenance care.
Clearly, this provision was designed with one goal in mind: to give the insurer nearly unlimited power to scrutinize a policyholder’s course of treatment, including the ability to insist that any given procedure is necessary to cure or minimize the disability and maximize medical improvement. It is easy to see how an insurer might invoke this provision to assert its control over the medical decision making of their policyholder and use the leverage of benefit termination and claims denial to dictate their treatment.
Imagine that you are a surgeon with a herniated disc in your cervical spine, and that your policy contains the provision cited above. Your insurer insists that a fusion of the surrounding vertebra is the procedure most likely to alleviate your disability. Your doctor disagrees, recommending a more conservative course of treatment, such as physical therapy, modified activity and medication, such as muscle relaxants. Your doctor also warns you that if you have the surgery, you will experience reduced mobility and risk adjacent segment degeneration. However, your disability benefits are your only source of income. Fearing a claim denial, you agree to the procedure despite your doctor’s concerns. This results in a no-lose scenario for the insurer.
The best case scenario, from your insurer’s perspective, is that the surgery (for which you bore all the risk both physically and financially) is successful and you are no longer disabled. At worst, the procedure fails and the insurer merely has to pay the benefits it was obligated to pay to you in the first place. For you, however, an unsuccessful procedure can mean exacerbation of your condition, increased pain, and prolonged suffering. It is therefore vital that you understand your rights under your policy.
Insurers are risk-averse by nature, and disability insurance is no different. Modern disability insurance policies, and particularly the medical care provisions, are designed to minimize the financial risk to the insurer. Insurers place an enormous burden on claimants to prove that their course of treatment meets the rigorous standards in their policy. Though stringent policy language can make it significantly more difficult to obtain the benefits you are entitled to, it does not strip you of your right to make your own medical decisions.
In order to preserve your medical autonomy in the disability claims process, you must become familiar with the details of your policy before filing a claim. Understanding the terms of your policy—including the care provision in your policy—is critical to successfully navigating a disability claim. You need to be familiar with your policy’s care requirements from the outset, so that you can communicate effectively with your physician to develop a plan of treatment that you are comfortable with and that comports with the terms of your policy.
Even if you have a basic understanding of your rights under you policy, it can be daunting to deal with an insurer that is aggressively seeking to dictate your medical care. In some cases, you may be forced to go to court to assert your right to make your own medical decisions—particularly if your policy contains one of the more recent, hyper-restrictive care provisions like the Great West provision above. Insurers know this, and they also know that most claimants are in no position to engage in a protracted court battle over whether they are receiving appropriate care. However, simply submitting to the medical mandates of your insurer to avoid the stresses and costs associated with litigation can have drastic consequences, depending on the nature of the medical care you are being asked to submit to. If you should find yourself in this difficult position, you should contact an experienced disability insurance attorney. He or she will be able to inform you of your rights under your policy and help you make an informed decision.
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 3
“Appropriate Care” and “Most Appropriate Care”
In this series, we are looking at the different types of care provisions disability insurers insert into their policies so that they can later argue that they have a right to dictate the terms of your medical care. In Part 1, we discussed how many policyholders do not even realize that their policy contains a care provision until the insurance company threatens to deny their claim for failure to obtain what the insurer perceives as sufficient medical care. We also discussed how care provisions have evolved over time to become more and more onerous to policyholders. In Part 2, we looked at one of the earliest and least stringent care provisions—the “regular care” provision—in detail.
In this post, we will be looking at a stricter care provision—the “appropriate care” provision. Here is an example of a typical “appropriate care” provision:
“Appropriate Care means you are receiving care by a Physician which is appropriate for the condition causing the disability.”
Disability insurance carriers implemented this policy language to allow their claims handlers and in-house doctors to weigh in on the type and quality of care their policyholders receive. As you’ll remember from Part 2 of this series, “regular care” provisions only required policyholders to be monitored regularly by a physician. Thus, under a “regular care” provision, as long as the policyholder was seeing a doctor, the insurer could not scrutinize or direct his or her treatment. Only by changing the policy language could they hope to have greater influence over the medical decisions of their policyholders.
This prompted insurers to add the additional requirement that the care must be “appropriate.” But what is “appropriate?” If you are suffering from cervical spinal stenosis, you likely have several reasonable treatment options available to you. For example, your physician might recommend physical therapy, but also indicate that you would be a candidate for more invasive treatment, such as steroid injections. If you have an “appropriate care” provision, does that mean that your insurer gets to decide which treatment you receive?
When presented with this question, most courts determined that “appropriate care” limits the insurer’s review of its policyholder’s care to whether it was necessary and causally related to the condition causing the disability. Courts also held that “appropriate” care does not mean perfect care or the best possible care—it simply means care that is suitable under the circumstances. Thus, if physical therapy, steroid injections, and surgery are all suitable treatments for cervical stenosis, most courts agree that your insurer cannot deny your claim or terminate your benefits based upon your decision to undergo a course of treatment they view as less effective than another.
In response to these cases, disability insurers again modified their policy language and created the “most appropriate” care provision. Here is an example of what a “most appropriate” care provision looks like:
“[You must receive] appropriate treatment and care, which conforms with generally accepted medical standards, by a doctor whose specialty or experience is the most appropriate for the disabling condition.”
This change places significant restrictions on a claimant’s autonomy not only because it limits the type of physician the claimant may choose, but because it restricts the claimant’s medical care to a singular “appropriate” course of treatment.
These types of provisions can make collecting disability benefits extremely difficult. For example, take the experience of Laura Neeb, a hospital administrator whose chemical sensitivity allergies became so severe that they rendered her totally disabled. After one of her doctors—Dr. Grodofsky—concluded that she had no identifiable allergies, Ms. Need sought another opinion from Dr. William Rea, founder of the Environmental Health Center in Dallas, Texas. Dr. Rea concluded that Ms. Neeb’s hypersensitivity to chemicals was so severe that she was “unable to engage in any type of work,” and required extensive treatment to manage the condition. Ms. Neeb’s insurer, Unum, nonetheless denied the claim. The court ultimately held that Ms. Neeb failed to obtain the “most appropriate care” by treating with Dr. Rea, agreeing with Unum that Dr. Grodofsky’s conclusions were correct.
Ms. Neeb’s case illustrates just how restrictive the “most appropriate care” provision can be. It places the burden squarely on the policyholder to show that their chosen course of treatment and treatment provider are most appropriate for their condition. If your policy contains a “most appropriate care” provision, it is essential that you find a qualified, supportive treatment provider who is willing to carefully document your treatment and the reasoning behind it. You do not want to place yourself in a position where you cannot justify the treatment you are receiving and must choose between an unwanted medical procedure and losing your benefits.
In the final post of this series, we will discuss the hyper-restrictive care provisions appearing in disability insurance policies being issued today and the serious threats they pose to patient autonomy.
 617 N.W.2d 777 (Mich. Ct. App. 2000)
 Sebastian v. Provident Life and Accident Insurance Co., 73 F.Supp.2d 521 (D. Md. 1999)
 Neeb v. Unum Life Ins. Co. of America, 2005 WL 839666 (2005).
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 1
Imagine that you are a dentist suffering from cervical degenerative disc disease. You can no longer perform clinical work without experiencing excruciating pain. You have been going to physical therapy and taking muscle relaxers prescribed by your primary care doctor, and you feel that these conservative treatments are helping. Like most dentists, you probably have an “own occupation” disability insurance policy. You are certain that if you file your disability claim, your insurer will approve your claim and pay you the benefits you need to replace your lost income and cover the costs of the medical treatment that has provided you with relief from your pain and improved your quality of life.
You file your claim, submit the forms and paperwork requested by the insurer, and wait for a response. To your dismay, your insurer informs you that its in-house physician has determined that the treatment prescribed by your doctor was inadequate. Your insurer then tells you that you should have been receiving steroid injections into your cervical spine, and tells you that if you do not submit to this unwanted, invasive medical procedure, your claim could be denied under the “medical care” provision in your policy.
You were not aware that such a provision existed, but, sure enough, when you review your policy more carefully, you realize that there is a provision requiring you to receive “appropriate medical care” in order to collect disability benefits. You think that your insurer is going too far by dictating what procedures you should or should not be receiving, but you are afraid that if you don’t comply with their demands, you will lose your disability benefits, which you desperately need.
This is precisely the sort of scenario presented to Richard Van Gemert, an oral surgeon who lost the vision in his left eye due to a cataract and chronic inflammation. Dr. Van Gemert’s disability insurance policies required that he receive care by a physician which is “appropriate for the condition causing the disability.” After years of resisting pressure from his insurers to undergo surgery, Dr. Van Gemert finally capitulated. Once Dr. Van Gemert received the surgery, you might expect that his insurer would pay his claim without further complaint. Instead, Dr. Van Gemert’s insurer promptly sued him to recover the years of benefits it had paid to him since it first asserted that he was required to undergo the surgery.
Unfortunately, “appropriate care” provisions, like the provision in Dr. Van Gemert’s policy, are becoming more and more common. The language in such provisions has also evolved over time, and not for the better. In the 1980s and 1990s, the simple “regular care” standard was commonplace. In the late 1990s and into the 2000s, insurers began using the more restrictive “appropriate care” standard. And, if you were to purchase a policy today, you would find that many contain a very stringent “most appropriate care” standard.
These increasingly onerous standards have been carefully crafted to provide insurers with more leverage to dictate policyholders’ medical care. However, there are several reasons why your insurance company should not be the one making your medical decisions. To begin, if you undergo a surgical procedure, it is you—and not the insurance company—who is bearing both the physical risk and the financial cost of the procedure. Perhaps you have co-morbid conditions that would make an otherwise safe and routine surgical procedure extremely risky. Perhaps there are multiple treatment options that are reasonable under the circumstances. Perhaps you believe conservative treatment provides better relief for your condition than surgery would. These are decisions that you have a right to make about your own body, regardless of what your insurer may be telling you.
In the remaining posts in this series, we will be looking at the different types of care provisions in more detail, and how far insurance companies can go in dictating your care in exchange for the payment of your disability benefits. We will also provide you with useful information that you can use when choosing a policy or reviewing the policy you have in place. In the next post we will be discussing the “regular care” standard found in most policies issued in the 1980s and early 1990s.
 See Provident Life and Accident Insurance Co. v. Van Gemert, 262 F.Supp.2d 1047 (2003)
In this two-part series we are addressing the two most common scenarios in which insurance companies pursue lump sum buyouts. In Part 1, we talked about buyouts for individuals who are totally and permanently disabled and have been on claim for several years. In Part 2, we will address the other scenario in which buyouts occur: after a lawsuit has been filed.
In the context of an individual disability insurance policy, a lawsuit is generally filed in one of two common scenarios: (1) a person on claim with a legitimate disability has their benefits terminated; or, (2) a person with a legitimate disability has their claim denied. A lawsuit is typically considered to be the last line of defense in the claims process. By the time a lawsuit has been filed, the claimant’s attorney has likely exhausted every available means to resolve the claim without legal action. Litigation is costly, time-consuming, and can drag on for years.
If an insurance company offers a lump sum buyout during litigation, it will typically be at one of three stages in the case: (1) after the Complaint and Answer are filed; (2) after all stages of pretrial litigation and discovery are complete; or (3) after the claimant/plaintiff wins at trial.
The first stage of any lawsuit is the filing of the Complaint. This is a document the plaintiff files with the court outlining all of the claims and allegations against the defendant. After receiving a copy of the Complaint, the defendant then has a specified period of time in which to file an Answer responding to the plaintiff’s allegations.
Prior to the filing of a lawsuit, a contested claim has likely been reviewed only by the insurance company’s in-house attorneys. However, once litigation begins, the insurance company will retain a law firm experienced in insurance litigation to handle the case. After the filing of the Complaint, the insurance company’s outside counsel will have the opportunity to evaluate the strength of the case and the claim. Viewing the case through the prism of their experience, the insurer’s litigation team may recommend offering a buyout to avoid the risk, costs, and time associated with the lawsuit.
The second point of a lawsuit at which a buyout may occur is after all stages of pretrial litigation are complete. Once the parties have had the opportunity to conduct discovery and litigate any pretrial motions, they will have a full picture of the case and their prospects at trial. Through discovery both sides will be able to obtain all documents and interview all witnesses the other side intends to use at trial. Through the filing of pretrial motions the parties can attempt to prevent or limit the use of certain evidence or witnesses at trial.
At this juncture, the insurance company may seek to avoid the risks of trial and settle the claim before the first juror is ever impaneled. The insurance company’s incentive to resolve the case at this point – even after both sides have invested substantial resources in the litigation – is the financial exposure and bad publicity it faces with a loss at trial. Additionally, a bad result at trial for the insurance company could create undesirable legal precedent for future cases.
If a jury (or a judge, depending on the case) determines that the insurance company has unlawfully denied or terminated a legitimate disability claim, the insurer will not only be required to pay the benefits the claimant/plaintiff is entitled to, but may also be liable for damages and other costs. The insurer may be required to pay back benefits, plaintiff’s attorneys’ fees and costs, consequential damages, and punitive damages.
In the context of a disability insurance lawsuit, consequential damages come in the form of any financial harm to the claimant/plaintiff resulting from the insurer’s denial or termination of benefits. For example, if the insurer’s termination of benefits led to the claimant/plaintiff losing their house in foreclosure, the insurer could be liable for consequential damages. Punitive damages are designed to deter the insurer from denying legitimate claims in the future, and can be multiplied several times over if the insurer is found to have acted in bad faith. Additionally, some states allow acceleration of benefits – in which the courts can order the insurer to immediately pay future benefits that would owed to the claimant/plaintiff over the full life of the policy.
The final stage at which a lump sum buyout may be offered is after a victory at trial by the claimant/plaintiff. You may be wondering why anybody would entertain a settlement offer right after a being awarded back benefits, damages, and costs at trial – why accept anything less? The answer is simple: appeals. The insurance company can tie up a trial court victory in the court of appeals for years, which they can use as leverage to offer a settlement smaller than the trial award.
Though these three stages of litigation are the most common points at which a buyout may occur, buyouts themselves are uncommon during litigation. Depending on the situation, the specter of a long, drawn out legal battle can either provide the insurance company with the incentive to settle the lawsuit early with a buyout or harden its resolve to fight the claim to the bitter end. You cannot count on simply filing a lawsuit and expecting the insurance company to be eager to settle. Some insurance companies want to settle early and avoid the financial risks and bad publicity of a defeat at trial, while others take a hard line and use their nearly limitless resources to fight a war of attrition. Ultimately, whether or not an insurer offers a lump sum buyout in the midst of litigation depends largely on the individual facts of the case, the risks at trial, and the parties and attorneys involved.
Lump sum buyouts are a frequent source of questions from our clients and potential clients. With that in mind, the next few posts will address different aspects of the buyout process.
Buyouts typically occur in one of two situations: 1) after you’ve been on claim for several years, or 2) after a lawsuit has been filed. This blog post will focus on the first scenario.
Lump sum buyouts that occur outside of litigation normally won’t occur unless and until the insurance company decides that you are totally and permanently disabled under the policy definition. Typically, the insurer won’t consider whether this is the case until you’ve been on claim for at least two years. If the insurer determines that you’re totally and permanently disabled, it will then determine whether it makes sense financially for the company to offer you a percentage of your total future benefits rather than keep paying your monthly benefits for the entire duration of your claim.
To understand how the insurance company calculates whether a buyout is in its financial interest, you should understand how insurance company reserves work. The purpose of reserves is to ensure that the insurance company has the resources to fulfill its obligations to policyholders even if the company has financial difficulties. Thus, disability insurers are required by state regulators to keep a certain amount of money set aside, or “reserved,” to pay future claims. Any money required to be kept in a reserve is money that the insurer can’t spend on other things or pay out in dividends. The amounts required to be kept in the reserve are determined by the state, depending on factors like how much the monthly benefit is and how long the claim is expected to last.
For a disability insurance claim, a graph of the required reserve amount over time looks like a Bell curve: low at the beginning, highest in the middle, and low again towards the end of the benefit period. The ideal time for a settlement, from an insurance company’s perspective, is at or just before the high middle point–typically about five to seven years into the claim, depending on the claimant’s age and the duration of the benefit period. At this point, the company is having to set aside the highest amount of money in the reserve.
If the insurance company can pay you a percentage of your total future benefits, it can not only save money in the long run, but it can release the money in the reserve. The insurer can then use those funds for other purposes, including providing dividends for its investors. In addition, the insurance company will save all of the administrative expenses it was putting towards monitoring your claim.
In the next post, we’ll address how and why buyouts occur after a lawsuit has been filed.
In previous posts, we have discussed the importance of properly documenting your disability. In this post we are going to discuss one way you can document your disability—pain journals.
A pain journal is exactly what is sounds like—a journal in which you document your pain levels and symptoms each day. Creating this sort of record will not only provide you with documentation when filing your claim, but will also allow you to effectively communicate with your treatment providers regarding your symptoms, so that they can provide you with appropriate care. Oftentimes, depending on your disability, you will go several days or weeks without speaking to your treatment providers. A pain journal can help you easily recall and communicate to your treatment provider everything that has happened since you last met with them.
Tips for Creating a Pain Journal
When creating a pain journal, you want to be as specific as possible so that your record is complete. You also want to make sure that you describe your plain clearly, so that you will be able to understand what you meant when you refer back to your journal.
Here are a few things you might consider documenting in your journal:
- The location of the pain.
- The level of the pain (if you use a numeric scale, be sure to also describe the scale).
- The duration of the pain.
- Any triggers to the pain.
- Any medications you are taking.
- Whether the medications you are taking are effective or have any adverse side effects.
- Any other symptoms in addition to the pain.
When filling out your pain journal, you may have a hard time coming up with a description that fits the type of pain you are experiencing, since all pain is not the same. However, you should avoid the temptation to document your pain in a generic way. The type of pain you are experiencing is just as important as your pain levels, and it is something that your insurer will likely ask you to describe.
To that end, here is a list of adjectives that are commonly used to describe pain:
Cutting; Burning; Cramps; Knots; Deep; Pulsing; Sharp; Shooting; Tender; Tight; Surface; Throbbing; Acute; Agonizing; Chronic; Dull; Gnawing; Inflamed; Raw; Severe; Stabbing; Stiff; Stinging
Sample Pain Journals:
American Pain Foundation Form:
American Cancer Society Form:
Peace Health Medical Group Form: