Abuse of Discretion
This is a standard of review that is often applied to claims that are subject to ERISA, and is one of the major disadvantages of employer-sponsored disability policies governed by ERISA. Under the abuse of discretion standard, the court must uphold a claim denial if the insurance company can produce a single rational basis for denying the claim.
Click here for more information about when the abuse of discretion standard is applied.
An actuarial department determines what kind of promise an insurance company is going to sell and how much the promise should cost. Actuaries analyze the financial consequences of risk and price the company’s product in a way that will allow the company to make a profit.
Click here for more information about the four major functions of an insurance company.
Generally speaking, “any occupation” (“any occ”) provisions state that an insured will be considered disabled if he or she is no longer able to perform the duties of any gainful occupation. Another common variation of the any occupation provision provides that an insured is totally disabled if he or she is “not able to engage in any gainful occupation in which [he or she] might reasonably be expected to engage because of education, training or experience.”
Obviously, “any occupation” provisions are much more restrictive than “own occupation” provisions, which simply require you to demonstrate that you can no longer perform your prior occupation. If your policy has an “any occupation” provision, you will generally have a much harder time collecting benefits than you would under an “own occupation” policy.
Some insurance companies sell policies that are initially “own occupation” policies for the first few years of coverage, but then convert to “any occupation” policies thereafter. If you have a policy that converts to an “any occupation” policy after a few years, your insurer could initially pay your benefits under the “own occ” provision, but then promptly terminate your benefits as soon as the “any occupation” provision becomes effective. Sometimes, these types of policies are mischaracterized as “own occupation” policies, so you must be sure to read your policy’s particular language carefully, to make sure that you are actually receiving a true “own occupation” policy.
Click here for more information about how “any occupation” provisions can affect your ability to collect disability benefits.
This is a legal term that refers to an insurer that appears to be investigating a claim, but in reality is not conducting a full and proper analysis. For example, an insurer might create a record showing that it timely requested information from an insured, but then fail to actually review the information that was collected. Artful neglect may subject a disability insurance carrier to bad faith liability.
Click here for more information about cases where insurance companies have been criticized for artful neglect.
Attending Physician’s Statement (APS)
This is a form that insurance companies use to collect information about an insured’s medical history, existing condition(s) and treatment. The form is usually completed by the insured’s primary treatment provider. However, in some cases, an insurance company may request an APS from a particular treatment provider, or from multiple treatment providers.
Click here for more information about how to approach your doctor about your disability claim.
This is a form that insurance companies use to collect a wide range of information about insureds. Usually, the insurance company will ask for an authorization at the outset of the claim, and then periodically ask you to renew the authorization as your claim progresses.
Many insureds think that the authorization simply allows the insurance company to collect medical records; however, most authorization forms grant the insurance company access to several other sources of information, including your business associates, employers, insurance agents, financial institutions, spouses/ex-spouses, employees/ex-employees, neighbors, co-workers, etc.
Click here for more information about how insurance companies use authorization forms to collect information they can use to deny your claim.
Automatic Increase Benefit
This is a policy provision that provides for periodic automatic increases to your benefit amount, without requiring any additional proof of medical or financial insurability. The increase usually occurs on an annual basis.
Click here for more information about how these riders work to protect your growing income.