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.
Standard is another disability insurer we will look at that specifically markets its policies to physicians and dentists.
StanCorp Financial Group (“StanCorp”) was founded in 1906 and uses the marketing name “The Standard” to refer to its primary subsidiaries, which include the Standard Insurance Company and the Standard Life Insurance Company of New York. In 2013, StanCorp received $351.7 million in pre-tax income, and $272.4 million (approximately 77%) of that income was attributable to profits from StanCorp’s insurance services. StanCorp is particularly proud of its consistent long term growth and—given the fact that 77% of StanCorp’s profits come from its insurance services—StanCorp has an obvious incentive to deny high paying claims submitted by physicians and dentists.
Company: StanCorp Financial Group, Inc.
Location: Portland, Oregon.
Associated Entities: Standard Insurance Company; The Standard Life Insurance Company of New York; StanCorp Investment Advisers, Inc.; Standard Retirement Services, Inc.; StanCorp Mortgage Investors, LLC.
Assets: $22.73 billion in 2014.
Notable Policy Features: If you are considering a Standard disability insurance policy, you should pay particular attention to whether the policy allows for total disability benefits if you are working in another occupation. Oftentimes, Standard policies will pay nothing more than residual disability benefits if you are able to secure other part-time employment. For example, if you can no longer practice dentistry, but you are able to teach classes at a dental college, Standard may refuse to pay you total disability benefits. If you are eligible for residual benefits, Standard will require you to submit proof of your income every single month.
Claims Management Approach: Standard tends to demand strict compliance with its claims procedures, and Standard will generally not be very accommodating if you make a mistake. This can be problematic, because, for many policyholders, the claims process is unfamiliar and daunting. If you are dealing with Standard, be sure to ask for a detailed explanation of what is required of you. You should pay close attention to deadlines, as they will likely not be flexible. You should also make sure that you use Standard’s forms when providing attending physician statements or other documentation of your disability, because Standard will not accept other insurers’ forms.
These profiles are based on our opinions and experience. Additional source(s): “Quick Facts About the Standard” and “About the Standard,” available at www.standard.com; StanCorp 2014 KBW Conference Presentation, available at investor.stancorpfinancial.com.