Working with Disability Claim Managers
– Know Your Rights and Be Vigilant

Even though disability insurance companies have a duty under Arizona law to give your interests equal consideration to their own, insurers rarely act for the policyholder’s benefit.   Claims benefit managers are frequently taught how to approach disability claimants to get a desired result, usually a denial or termination of disability benefits.  From our years of experience with the disability insurance industry, we have learned some of the tactics claims personnel use.  The following is a list of strategies to beware of.  Though not every disability claim manager engages in these practices, it is always a good idea for claimants to be vigilant in order to protect their rights under their policy.

  • Treating claims like a unit of production.  Disability insurance companies often don’t care to know how being disabled and filing for benefits affects you personally.  Don’t expect that they will understand or be sympathetic to the personal toll the entire process takes on a claimant, especially a doctor or dentist who has spent years in study and practice to achieve professional success.  To disability insurers, each claim is a unit of production being channeled towards an end goal.
  • Misinterpreting policy provisions.  Disability insurance claims managers are not lawyers, and just like most people, often have trouble properly interpreting complicated insurance policies.  For example, claims personnel might inform an insured that her claim is an “any occupation” policy when in fact it is an “own occupation” policy.
  • Claiming rights that don’t exist under the policy.  Claims managers will also frequently indicate that the disability insurance company can make claimants do certain things or provide certain information that is not actually required under the individual policy.  For instance, an insurer might tell a claimant he needs to complete a detailed daily activity report, when there is actually no such requirement to do so in his policy.  Make sure you know what your policy does and does not actually allow.
  • Acting like your friend.  Employees of disability insurance companies often try to act like your friend or partner in the process, when they are actually channeling your disability claim towards denial or termination of benefits.  Often, claims managers will call an insured for a friendly chat, all the while peppering the insured with seemingly innocuous questions meant to provide evidence for claim denial.  Policyholders should understand the questions being asked, and not get distracted by the congeniality of the caller.
  • Sending “field investigators” to talk about your claim. Another common practice in the disability insurance industry is to schedule an in-person interview in the claimant’s home with a “field investigator.”  These interviewers will spend hours asking about your symptoms and activities in excruciating detail, taking copious notes and even asking to photograph you.  What they may not make clear is that the field investigator has no authority over the disposition of your claim.  Rather, he or she is a private investigator hired by your insurance company to gather evidence against your claim and provide a starting point for surveillance.

The best way to make sure that these claims management practices aren’t used to take advantage of you when making a claim for disability benefits is to enlist a disability insurance attorney who knows the tactics used and how to guard against them.  Nevertheless, every insured should understand their insurance company’s approach to claims management and be cautious in their interactions with claims management personnel.



How Specific is Your “Own Occupation”?

We have discussed many times the importance of an “own occupation” disability insurance policy. Such policies provide benefits if the insured is unable to perform the substantial and material duties of his own occupation, rather than requiring that the insured be unable to perform any occupation anywhere. But how specific is your own occupation?

John Simon, an environmental trial lawyer with a national practice, became disabled after an automobile accident. Pain in his legs made sitting, standing, and driving difficult. He had hand tremors, and pain medication caused a cognitive decline. He was diagnosed with regional pain syndrome and post-traumatic stress disorder. Yet Prudential Insurance only paid benefits for a year before terminating Simon, claiming that law was a sedentary profession and that there was no proof that he was incapable of performing his “occupation.”

As the District Court found in its decision, Simon “was no ordinary lawyer.” He was able to establish that his national environmental law practice required extensive travel by air and automobile, including carrying heavy files. Simon spent most of his time outside of the office developing a client base, litigating, lecturing on environmental law, and serving on a government commission.

Most of Simon’s practice was originating clients for the firm rather than performing extensive legal work on each case. During his disability period, his bonuses from the firm actually increased—from his fee sharing for bringing in new clients. Thus his bonuses reflected past rather than present efforts. Though the insurer pointed to Simon’s increasing compensation as evidence of his ability to practice law, it failed to investigate the nature of that compensation.

The court found that Prudential failed to consider the functional requirements of Simon’s particular work activities. It held that all of the factors weighed in favor of concluding that Prudential’s termination of benefits was arbitrary and capricious. John Simon had his disability benefits reinstated.

This case is an excellent example of how important it is to ensure that a disability claim is properly presented to the insurance company. All too often, disability insurers attempt to misclassify insureds’ occupations as to scope or type of duties. It may be necessary, as it was in this case, to litigate to force the insurer to recognize its obligations under the disability insurance policy. Thus, if you are filing a disability insurance claim, it is important to consult with an experienced disability insurance attorney.



The 10 Biggest Legal Mistakes Physicians Make
When Filing a Disability Claim (Mistake #2)

Any medical or dental professional considering filing a claim or weighing long-term disability insurance policy options should be familiar with two key policy terms: “total disability” and “occupation.”

Misinterpreting the definitions of “total disability” and “occupation” and/or falling prey to other common pitfalls can lead to having your claim denied or your benefits terminated.

Ed Comitz’s article “The 10 Biggest Legal Mistakes Physicians Make When Filing a Claim for Disability,” published by SEAK, Inc. (2005), details ten of the most significant mistakes to avoid. The excerpt below explains the importance of understanding these crucial definitions in your policy:

MISTAKE NO. 2:   Misunderstanding the Definitions of “Disability” and “Occupation”

Because there is no such thing as a “standard” disability insurance policy, the definitions of “disability” can significantly vary.  Most physicians purchase “own-occupation” policies, which provide compensation following a disability that prevents the insured from performing the particular duties of his or her occupation.  Thus, the insured may be entitled to benefits even if he or she could in fact perform work of a different nature.  The central issue in many cases is the definition of “total disability,” which could variously mean that the insured cannot perform “all” or “every” duty of his or her occupation, or the “substantial and material duties” of his or her occupation. 

Similarly, the term “occupation” may be specifically defined in the policy (e.g., “invasive cardiologist”) or may refer to the insured’s occupation immediately prior to the time that disability benefits are sought.  In the latter situation, if the physician reduces his or her hours in the months preceding claim filing, the insurer may consider his or her occupation to be part-time rather than full-time.  Similarly, the term “occupation” may be comprised not only of the duties of a physician’s specialty, but also of significant travel time, teaching engagements, or other areas in which the physician spends time or draws revenue.  For example, “occupation” may be defined as “internist/professor/business owner,” in which case the physician may not be “totally disabled” if he or she can still teach or perform management functions.

Action Step:  Physicians should read and fully understand their policy terms before filing a claim for benefits.

Even if you read how these terms are defined in your own policy, you may not realize the significance of the definitions if you do not have a full understanding of the claims process and/or you have never seen any other policies for comparison as a frame of reference. Being familiar with the several variations of “own occupation” policies being sold by insurers can help you determine whether you have a true own occupation policy.

To learn more about some of the tactics insurers use to deny claims and other mistakes to avoid, click here.

Search Our Site