What to Expect When Filing a Disability Claim

When it comes time to file a disability claim, many professionals believe that they’ll just submit their claim forms, have their doctor sign a statement verifying their disabling condition, and start receiving their monthly benefit checks. But filing a disability claim is much more involved than that.

The process begins when you give notice to your insurer of your claim, and request the initial packet of claim forms. Many insurers now require you to call-in to request the forms, as this gives them the opportunity to conduct an impromptu interview, catch you off guard and collect as much information from you as they can before you have a chance to see the claim forms, review your policy or talk with an attorney about the proper scope of a disability claim investigation. And this interview is only the beginning.

Once you have the forms, there are trick questions on the forms that can prejudice your ability to collect if not answered precisely and correctly. After these first forms are submitted, the investigation continues based upon your responses on the claim forms, and the insurance company will likely have several follow-up questions as they look for ways that they can deny your claim, or limit their liability (by, for example, paying you partial/residual disability benefits, instead of total disability benefits).

It’s also important to remember that this is not a one-time process. You will have to continue to provide satisfactory proof of loss to your insurer on an ongoing basis for as long as your claim is active, and your insurer has a right under your policy to continue to investigate your claim at any point until your maximum benefit period is reached and your policy expires.

While each claim is different, insurance companies will typically:

Speak with your treatment providers, family, friends and co-workers about your condition. The insurance company will have you sign authorizations that grant the insurance company sweeping authority to speak directly with a host of individuals (e.g. any physician you have ever been treated by, pharmacies, benefit plan administrators, insurance agents, financial institutions, the Social Security Administration, family, friends, co-workers and employees, among others).

Request a wide range of personal information. Most authorizations also allow the disability insurer to request virtually any information not otherwise barred by law–not just medical records. The information can include medical records, tests, or consultations, prescription history, mental health records, HIV/AIDS treatment information, records for any substance abuse treatment, court records, occupational data, employment history, driving history, financial statements, and your earning history.

Schedule face-to-face interviews with you. Many insurers seek to interview you in your home, so that they can view your surroundings to see if they can find discrepancies in the claim, or learn more about you so that it is easier for them to conduct surveillance. These interviews can be stressful if you’ve never experienced them before, and they can be particularly difficult if you are expected to discuss your medical conditions and the facts surrounding them with a complete stranger who you have never met.

Order an In-Person Exam. The insurance company may claim that the exam is used to verify a disability; however, insurers also use these exams as a means to criticize your provider’s course of treatment, or dispute your own provider’s conclusions and diagnoses. Most disability policies also provide that refusal to participate in an exam allows the insurance company to deny a claim or terminate benefits.

Use a private investigator to conduct surveillance. The insurance company may employ a private investigator to conduct photo, video and/or online surveillance, in an attempt to find discrepancies in your claim, or evidence of “malingering.” This can pose a particular challenge for dentist and physician claims, as oftentimes a dentist or physician’s symptoms may be significantly alleviated once he or she steps away from the demands of practicing.

This process can be very invasive and, if you have never experienced the claim process before, it can be hard to tell whether your insurer is taking things too far. If you feel your insurance company is being too aggressive, an experienced disability insurance attorney can assess the scope of the investigation and advise whether the insurer’s conduct is proper.

How Long Does It Take to Get Benefits? – Part 2

In an ideal world, you’d receive a favorable decision and your first benefit check shortly after your disability insurance policy’s elimination period is satisfied.  Unfortunately, even wholly legitimate disability claims get scrutinized, questioned, delayed, and in some cases, denied.  Below are a few common reasons disability benefit payments are delayed, particularly at the outset of a disability claim.

Improperly Completed/Partially Completed Forms

If your initial claim forms are missing information, unreadable, or incomplete, your disability insurer will likely issue additional forms for completion or use the missing information as an excuse to delay processing the disability claim.  This applies to both the forms that you are required to complete and sign and the forms the insurer gives you to give to your doctor to fill out, so it is important to follow up with your doctor and make sure that all of the necessary forms are completed and returned in a timely fashion.  If you do not carefully document your disability claim, and you do not promptly respond to requests for follow-up information, most insurers will delay making a claim decision until you provide them with the requested information.

Pending Requests for Information

At the outset of your disability insurance claim, your insurer will require you to sign an authorization that allows them to request a wide range of information from a wide range of sources, including your doctors and employer.  Oftentimes, the insurer will request information from these other sources (without telling you) and then will delay making a decision on your disability claim if any of these requests remain pending.

This means that even if you provide the insurance company with everything they requested from you, there may be other information that the company is waiting that is holding up the claims decision.  Consequently, it’s important to ask the insurance company to find out if there are any pending requests, adn then follow up with your doctors, employers, etc. as needed to ensure that the information is provided.

It’s also important to keep tabs on the pending requests, to determine whether the scope of the disability insurer’s investigation is appropriate.  An experienced disability attorney can advise you on whether a particular request for information is warranted under the circumstances of your particular claim.

Failure to Schedule Medical Examinations/Interviews

When you file a disability claim, insurers will almost always require that you participate in a detailed interview and/or undergo an independent medical examination (IME).  While the stated point of these requests is to confirm or verify your disability, they can often be an attempt by your insurer to discredit your own doctor or medical records and generate fodder to deny your disability claim.  Depending on the nature of your condition, your disability insurer might also request other types of interviews or exams—such as a functional capacity evaluation (FCE) or neuropsychological evaluation.

Some claimants (mistakenly) believe that if they keep putting off these exams, then they’ll be able to avoid the exams.  However, most disability policies contain a provision that expressly requires the policyholder to submit to exams, and states that failure to do so is grounds for denying a claim or terminating disability benefits.  So if you put off these exams, it’s only going to delay the company’s claim decision, and possibly result in a claim denial.  However, keep in mind that going into a medical examination, IME, or interview unprepared can be just as bad for your claim, so it’s very important to prepare beforehand.  Once again, an experienced disability attorney can advise you regarding the proper scope of an interview or IME, and can also be present for the interview or IME, if desired.

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How Long Does It Take to Get Benefits? – Part 1

You’ve made the difficult decision to give up practicing medicine or dentistry and file a disability 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 disability insurance policy, your insurance company, the assigned benefits analyst, and the complexity of your disability claim, among other things.

Filing a Claim

Your disability insurance policy should outline the requirements for filing a disability claim.  Typically, you must give notice of your disability 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 disability claim.  Significantly, if you don’t provide timely notice, it can also foreclose your ability to collect disability benefits (depending on the circumstances, and the reason for the delay).

Once you file your disability claim with your insurer, they will then send disability 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 disability insurance 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 disability insurer an excuse to prolong the decision-making process.

Elimination and Accumulation Periods

Your disability insurance 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 disability 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 disability insurance 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, disability 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 disability claims, it takes much longer for a benefit to be issued.  In our next post, we will address some of the most common reasons disability benefit payments are delayed.

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Do I Have to Keep Paying Premiums Even Though I’m Disabled?

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 disability 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 disability 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.

————————————————————————————————————————————

Waiver of Premium Benefit

We will waive Premiums of this Policy from the date of Total Disability after the later of:

  • 90 consecutive days of Total Disability, or
  • The end of the Elimination Period.

When we approve the Waiver of Premium, We will refund any Premiums paid from the first day of Total Disability. Waiver of Premium will continue while You are receiving a Total or Partial Disability Benefit of this Policy or a Rider. When You are no longer eligible for Waiver of Premiums, You must resume payment of Premiums to keep Your Policy in force.

————————————————————————————————————————————

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.

The Takeaway

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 disability insurance 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.

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I used to practice __________ but now I’m _____________?

As a dentist or physician, 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 disability benefits by alleging that a legitimately disabled claimant is:

  • Malingering
  • 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 disability 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.

Disability 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.  Disability 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 disability 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 disability insurers.

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Understanding Your Policy: Examination Provisions

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, disability 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 disability insurance policy.

Other provisions, like this medical examination provision from a Standard Insurance Company individual disability insurance policy, expressly condition the payment of disability 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 disability 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 disability insurance 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 disability insurance policy, contact an experienced disability insurance attorney.

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Understanding Your Policy: Maximum Benefit Period

Your maximum benefit period is one of the most important provisions in your disability insurance policy. Its terms control the period of time during which you are eligible to receive disability benefits under your policy.

Oftentimes the maximum benefit period is more complicated than you may expect. For instance, most newer disability policies contain a benefit schedule that details the length of your benefit period more precisely, based upon your age at the time the claim is filed.  This policy from MetLife contains a maximum benefit period schedule similar to those found in many disability insurance policies:


Table A.         Maximum Benefit Period Varies By Age When Disability Begins

Age When Disability Begins               Maximum Benefit Period

Before Age 61                                               To Age 65

At Age 61, before Age 62                              48 Months

At Age 62, before Age 63                              42 Months

At Age 63, before Age 64                              36 Months

At Age 64, before Age 65                              30 Months

At Age 65, before Age 75                              24 Months

At or after Age 75                                           12 Months

As you can see, under this sort of provision, the maximum benefit period is reduced based upon how old you are when your disability begins.

It is important be aware that all of the relevant information for determining your maximum benefits period is not always located in the same part of your disability insurance policy.  For example, your policy summary may contain an asterisk and then, in fine print at the bottom of the schedule state something like “*The Maximum Benefit Period may change due to your age at total disability.  Please see Policy Schedule II.” Then, if you notice the fine print and turn to Schedule II, you see something similar to the MetLife schedule, above, that limits the benefit period based upon your age at the onset of disability.

Other disability insurance policies require a bit more calculation.  For example, policies like this one from Mutual of Omaha take your Social Security Normal Retirement Age into account:

61 or less: to Age 65 or to Your Social Security Normal Retirement Age, or 3 years and 6 months, whichever is longer
62:  to Your Social Security Normal Retirement Age or 3 years and six months, whichever is longer
63:   to Your Social Security Normal Retirement Age or 3 years, whichever is longer
64:   to Your Social Security Normal Retirement Age or 2 years and 6 months, whichever is longer
65:   2 years
66:   1 year and 9 months
67:   1 year and 6 months
68:   1 year and 3 months
69 or older: 1 year

If your policy contains a provision like this, you can use this calculator to determine your Normal Retirement Age, to determine exactly how long you are entitled to disability benefits.

Finally, it is important to note that many disability insurance policies have specific, limited benefit periods for certain conditions such as mental illness and substance abuse (and typically restrict coverage for these sorts of conditions to a short time frame—usually 1 or 2 years).

As you can see, the maximum benefit provision can take many different forms in a disability insurance policy. It is critical that you read your policy carefully and have a firm grasp on how your maximum benefit period provision affects your eligibility for disability benefits. If you have any questions about your disability insurance policy, contact an experienced disability insurance attorney.

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The Devil Is In the Details: Long Term Disability Policies and Benefit Offsets

In a previous post, we discussed a feature of long-term disability insurance policies that is easily overlooked and frequently leaves policyholders feeling cheated and deceived by their insurer:  the benefit offset provision.  When a person signs up for a disability insurance policy, he or she expects to pay a certain premium in exchange for the assurance that the insurance company will provide the agreed-upon monthly benefit listed in the policy, should they ever become disabled.  What many people do not realize is that some disability insurance policies contain language that permits the insurer to reduce the amount of monthly disability benefits it is required to pay if the policyholder receives other benefits from another source.

Worker’s compensation, supplementary disability insurance policies, state disability benefits, and social security are some of the most common “other sources” from which policyholders may unexpectedly find their disability insurance benefits subject to an offset.  The frequency of offset provisions varies by policy type.  They are more likely to appear in group policies and employer-sponsored ERISA policies, and are rarely found in individual disability insurance policies.

Benefit offset provisions can have significant and often unforeseen financial repercussions, as illustrated by the recent account of a couple from Fremont, Nebraska.  As reported by WOWT Channel 6 News, Mike Rydel and his wife Carla were receiving monthly benefits under Mr. Rydel’s disability insurance policy with Cigna.  Mr. Rydel had suffered a stroke in the fall of 2015 that had left him incapacitated and unable to work.  The Rydels’ financial situation was made even more dire by Mr. Rydel’s need for 24-hour care, which prevented Mrs. Rydel from working as well.

In an effort to supplement his family’s income, Mr. Rydel applied for Social Security disability benefits.  When his claim was approved, the Rydels expected a much needed boost to their monthly income.  Unfortunately, due to an offset provision in Mr. Rydel’s policy, his monthly disability benefits under the Cigna policy were reduced as a result of the approved Social Security claim, and his family did not realize any increase in income.

The Rydels were understandably shocked when they were informed by Cigna that Mr. Rydel’s monthly disability insurance benefits would be reduced by the amount he was now receiving from Social Security, and that Cigna would be pocketing the difference.  Perversely, the only party that benefited from Mr. Rydel’s SSDI benefits was Cigna, which was off the hook for a portion of Mr. Rydel’s monthly benefits.  In response to an inquiry from WOWT, Cigna simply asserted that “coordination” of private insurance benefits and government benefits was a long-standing practice – an assurance that likely provided no solace to the Rydels.

The Rydels’ story highlights the importance of carefully reviewing every aspect of your disability insurance policy before signing.  Benefit offsets, policy riders, occupational definitions, and appropriate care standards in your policy can significantly impact your ability to collect full benefits if you become disabled.  You should review your disability insurance policy carefully to determine if it contains any offset provisions that may affect your benefits.  If it does, you will need to take them into account when estimating your monthly benefits.

References:

http://www.wowt.com/content/news/Stroke-Victim-Suffers-Disability-Insurance-Set-Back-385758411.html

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What is a Pain Journal and Why Are They Important?

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 disability 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:

  1. The location of the pain.
  1. The level of the pain (if you use a numeric scale, be sure to also describe the scale).
  1. The duration of the pain.
  1. Any triggers to the pain.
  1. Any medications you are taking.
  1. Whether the medications you are taking are effective or have any adverse side effects.
  1. 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 disability 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:

http://static1.1.sqspcdn.com/static/f/780996/10986694/1298931690137/Partners+Againts+Pain+Daily_Pain_Diary.pdf?token=%2BxUZiQYiQI0BQuASODoUtMrCRaE%3D

American Cancer Society Form:

http://static1.1.sqspcdn.com/static/f/780996/10986775/1298931779760/pain_diary.pdf?token=4N2osqMoTgvDsWtePLtKqJGthag%3D

Peace Health Medical Group Form:

http://static1.1.sqspcdn.com/static/f/780996/10986822/1298931923430/Peace+Health+Pain+Diary.pdf?token=qqil7fKha7RaXW7%2FgJ8tCnXxihY%3D

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The Four Functions of Insurance

In this post, we are going to discuss the four functions of an insurance company.

Introduction – The Promise

Insurance is not like any other business.  Rather than selling a tangible product that you receive immediately upon paying for it, insurance companies are selling an important promise—a promise of protection, security and peace of mind if something goes wrong.

When you buy a car, you give someone money and you take a car home.  When you buy groceries, you pay money and get your groceries.  Insurance is different.  With insurance, you give them money and trust, and hope and pray that you never have to collect.

The Four Functions of Insurance

The activities of an insurance company can be divided into four major functions:

1.  Actuarial

The actuarial department is concerned with what kind of promise the company is going to sell and how much the promise should cost.  Essentially, the actuaries’ role is to analyze the financial consequences of risk and price the company’s product in a way that will allow the company to make a profit.  For example, an actuary working for a car insurance company might calculate the risk that potential customers will be in a car accident, and then adjust premium amounts to account for that risk so that the insurer can pay accident claims and still make money.

2.  Marketing

The marketing department is concerned with how to get people to buy the promise being sold.  They design ads and employ sales people.  Basically, this department’s goal is to get people interested in buying the promise.

3.  Underwriting

The underwriting department determines who the company should sell the promise to.  Underwriters review applications and assess whether the company should allow applicants to purchase the promise.  For example, the underwriting department of a life insurance company might review health questionnaires submitted by applicants to assess whether the level of risk is low enough to provide life insurance to the applicant.

4.  Claims

The claims department’s role is to process and pay legitimate claims. While the first three departments are very much concerned about profitability, the claims department is not supposed to consider company profitability when adjusting a claim.  If the actuaries made a mistake and sold a product that is costing the company too much money, the product was not marketed correctly, or if underwriting was too lax, the company is supposed to pay legitimate claims and bear the loss.

Conclusion

As we have discussed in previous posts, an insurance company has a legal obligation to treat its customers fairly and deal with its customers in good faith.  Ideally, the disability insurance claim process should be simple.  You should inform the company that you meet the standards of the contract, provide certification from a doctor of that fact, and collect your disability benefits.  It is not supposed to be an adversarial process.

Unfortunately, in instances where one or all of the first three departments mess up, some insurance companies improperly shift the burden of making a profit onto the claims department.  This, in turn, transforms the claims process into an adversarial process.

If you have an experienced disability attorney involved from the outset of your disability claim, your attorney can monitor the insurance company to make sure that they are complying with their legal obligations.  If you have already filed a disability claim, but believe that your insurer is not properly processing your claim, an experienced attorney can review the insurer’s conduct and determine whether the disability insurer is acting in bad faith.

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Deciphering Mental Disorders and Substance Abuse Policy Exclusions – Part 2

In Part 1, we looked at how disability insurance companies broadly define mental disorders and substance abuse.  In this post, we will be looking at a sample mental disorder and substance abuse limitation provision.

What Does a Mental Disorder and Substance Abuse Limitation Look Like?

Here is a sample limitation provision from an actual disability policy (this provision is taken from the same policy containing the definition of “mental disorders and/or substance abuse disorders” discussed in Part 1):

maximum indemnity period means the maximum length of time for which benefits are to be paid during any period of total disability (see the Policy Schedule on Page 1). Benefits will not be paid beyond the policy anniversary that falls on or most nearly after your sixty-seventh birthday, or for 24 months, if longer, except as provided by this policy.  In addition to any limitations described above, the maximum indemnity period for a disability due to a mental disorder and/or substance abuse disorder is also subject to the following limitations:  (a) The lifetime maximum indemnity period is 24 months; (b) the 24-month limitation also applies to all supplementary benefits payable by virtue of your disability due to a mental disorder and/or substance abuse disorder; (c) any month in which benefits are paid for a mental disorder and/or substance abuse disorder (regardless of whether paid under the base policy any supplementary benefits or both) shall count toward the 24-month limitation; (d) this limitation applies to this policy and all supplementary benefits under this policy.

Note that this provision is not entitled “mental disorder limitation” or “substance abuse limitation.”  Instead, it is entitled “maximum indemnity period.”  In fact, this provision is actually part of the policy’s definition section, and not the main part of the policy—highlighting the importance of carefully reviewing the definitions in your disability insurance policy.

Note also that this particular provision provides that any month in which disability benefits are paid counts against the 24 month limit.  So, for example, if you received disability benefits for a period of 12 months in connection with a substance abuse related disability, and subsequently returned to work, the next time you needed to file a claim related to a mental disorder or substance abuse, you could only receive a maximum of 12 months of disability benefits.

Conclusion

When purchasing a disability policy, watch out for mental disorder and substance abuse exclusions and limitations.  Always be sure to ready your policy carefully so that you understand the scope of the protection you are purchasing.  If you already have a disability policy, an experienced disability insurance attorney can review your policy and determine whether it contains any mental disorder or substance abuse limitations that might limit your ability to collect disability benefits under your policy.

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Deciphering Mental Disorders and Substance Abuse Exclusions – Part 1

In previous posts, we have discussed how many disability policies contain mental disorder and/or substance abuse exclusions that either prevent claimants from collecting disability benefits under their policies, or severely limit claimants’ right to collect—usually to 24 months or less.

Sometimes, it can be hard to tell if your disability insurance policy contains such an exclusion.  Policy language can be difficult to decipher, and it becomes even more difficult in cases where the terms of the exclusion are contained within multiple provisions of the disability policy.

In the next few posts, we are going to discuss mental disorder and substance abuse exclusions.  In Part 1, we will look at an example of how insurance companies define mental disorders and substance abuse.  In Part 2, we will look at an example of a mental disorder and substance abuse limitation provision.

How Do Insurance Company’s Define Mental Disorders and Substance Abuse?

Each policy’s definition varies, depending on the insurance company.  Here is a sample definition taken from an actual insurance policy:

mental disorders and/or substance abuse disorders mean any of the disorders classified in the most current edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association (APA). Such disorders include, but are not limited to, psychotic, emotional, or behavioral disorders, or disorders relatable to stress or to substance abuse or dependency. If the Manual is discontinued, we will use the replacement chosen by the APA, or by an organization which succeeds it.

As you can see, this definition is quite broad and could potentially encompass quite a few disabling conditions.  Since the policy provision does not actually list out specific disorders, at best you would need to consult the APA manual, in addition to your disability policy, to find out what this provision actually means.  And if your particular disorder does not fit neatly within the APA’s framework, you will likely have to go to court to determine whether your disorder falls within the policy’s definition of mental disorders and/or substance abuse disorders.

Also, because the definition is based upon the “most current edition” of the Diagnostic and Statistical Manual of Mental Disorders published by the APA, the types of disorders covered by the limitation will change each time the APA publishes a new manual.

These are just a few of the reasons why disability claims involving mental disorders and substance abuse disorders can be particularly tricky.  In the next post, we will look at an example of what a mental disorder/substance abuse disorder limitation provision looks like.

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Case Study: The Importance of Proper Documentation

In previous posts, we have discussed the importance of properly documenting your disability claim. From the moment you file your disability claim, most insurers begin collecting as much documentation as possible in the hopes that they can use the documentation to deny your initial claim, or terminate your disability benefits later on.

Oftentimes, disability benefits are terminated without warning. For example, an insurance company may conduct covert surveillance over an extended period of time, and then suddenly terminate your disability benefits once they feel that they have sufficient footage to assert that you are not disabled. If you are not consistently documenting the ongoing nature and extent of your disability, you may find yourself lacking sufficient evidence to contest a denial or termination of benefits.

For example, in the recent case Shaw v. Life Insurance Company of North America[1], the insurer refused to pay claimant her disability benefits. Although claimant saw multiple doctors and psychiatrists for PTSD and depression before filing her disability claim, the court ultimately found that the medical records she submitted were deficient, for several reasons.

First, even though claimant was asserting mental health claims, the claimant’s primary treatment provider was a family practice physician, not a psychologist or psychiatrist. Additionally, the court observed that the family practice physician’s records were “cursory, and contain[ed] minimal documentation of the frequency or intensity of [claimant’s] symptoms.”  Id. To make matters worse, the claimant only saw the psychiatrists for a period of a few months, and the psychiatrists’ records showed that claimant had refused to follow the recommended treatment plan, which included both psychiatric medication and cognitive treatment.

The claimant attempted to supplement her medical records using a narrative letter she wrote describing her symptoms, along with several letters from family and friends. However, the court ultimately found the narratives unconvincing because there was a “significant potential for bias,” the severity levels described in the narratives conflicted with the psychiatrists reports, and claimant’s friends and family were not medical specialists or care providers and therefore could not diagnose claimant’s medical condition or assess claimant’s functional capacity. Id.

In the end, the court affirmed the denial of disability benefits, even under de novo review. Id.

What could the claimant have done better to avoid the denial?  For one, she could have used a psychiatrist or psychologist as her primary treatment provider. She also could have followed the treatment plan recommended by her psychiatrists. Finally, she could have asked her physician to provide more thorough documentation.

Remember, courts will generally want to see medical records, not statements from friends and family. While such statements can be a useful way to provide background information, a court will want to see documentation of diagnosis and treatment by a health care provider. An experienced disability insurance attorney can help you review your medical records and determine if they are sufficient in comparison to the documentation that the insurance company will almost assuredly be collecting.

[1] No. CV1407955MMMFFMX, 2015 WL 6755187 (C.D. Cal. Nov. 4, 2015).

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Disability Insurance Profiles: Principal Life

We are expanding our list of insurance company profiles that specifically market to dentists and doctors to include Principal Life.

See our other profiles of Great-West, MassMutual, MetLife, Northwestern Mutual, Guardian, Hartford, and Standard.

Principal Life (also known as “Principal Financial Group”) was founded in 1879.  Initially, Principal Life operated primarily as an insurance company. Principal Life is now a member of the Fortune 500, and offers several additional services, such as retirement and asset management. Principal has most recently realized a growth in net income from $1.112 billion in June of 2014 to $1.290 billion in June of 2015.

Company: Principal Financial Group or The Principal.

Location: Des Moines, Iowa.

Associated Entities: Principal Financial Services, Inc.; Principal Life Insurance Company; Principal Real Estate Investors, LLC; Spectrum Asset Management, Inc.; Post Advisory Group, LLC; Columbus Circle Investors; Edge Management, Inc.; Morley Financial Services Inc.; Finisterre Capital, LLP.

Assets: $530.3 billion.

Notable Policy Features:

Principal Life sells polices that define “disability” as “own occupation”, which means that you are considered totally disabled if you are unable to perform the duties of your occupation. While this may seem like the right policy for a medical professional, you should be aware of a couple caveats.  Coverage under a Principal Life policy is, in part, based upon a key definition that is usually referred to as your “occupation period.”  Essentially, your “occupation period” is the time frame during which the “own occupation” definition of totally disabled applied.  Once the “occupation period” has expired, Principal Life will only pay you benefits if you are unable to work in any occupation that you are reasonably suited to work in, based on your education, training, and experience.

The length of your “occupation period” can range from a base of 2 years after your disability to a period of 5 years, until age 65, until age 67, or until age 70, depending on your “occupation class.”  Oftentimes, the policy provisions regarding “occupation periods” can be convoluted and difficult to decipher.  If you unsure about the length of your “occupation period” under the terms of the policy, an experienced disability insurance attorney can help you understand the applicable policy language.

Claims Management Approach:

In comparison with other insurance companies, Principal Life generally conducts more in-person field interviews with claimants.  Principal Life will not only conduct a field interview when you initially file your claim, but will also likely conduct several additional follow up interviews throughout the claims process.

Most insurance companies require you to fill out generic questionnaires that ask for information about the nature of your disability, among other things.  Because Principal Life handles a lot of disability claims by physicians, it has created a particular “Medical Professional Occupation and Financial Questionnaire” that is more comprehensive than a generic questionnaire, and is specifically tailored towards collecting information from medical professionals.  The questionnaire is quite extensive, and asks about a wide variety of information, from your ownership interest in your practice, to whether your practice participates in a health care network, to the credentials of the medical professional owners and associate professionals you work with, to whether you receive any reimbursements from prescriptions.  If you are unsure about the content or scope of any questionnaire you receive, an experienced disability insurance attorney can help answer any questions you may have.

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“Working Through Pain:
How Chronic Conditions Affect Dentists”

Dentists are particularly at risk for disability due to the strenuous nature of their job.  Dentists are also some of the most likely to keep working through the pain–even if they shouldn’t be.  Our new article in Dentaltown Magazine explores how working through chronic pain can affect dentists in their personal and professional lives.  Read the full article at Dentaltown today.

“Working Through Pain: How Chronic Conditions Affect Dentists”

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