Principal Disability Claim Tips for Physicians
Our law firm has extensive experience filing and litigating Principal disability claims for physicians. Our attorneys understand how Principal operates and what it takes to file a successful Principal disability claim, and are happy to set up a free consultation to discuss your particular Principal claim.
Below are some answers to the most common questions our attorneys receive from physicians about the disability claim process, generally, and their Principal disability benefits, specifically.
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4. I’m a board-certified physician with what I believe is an “own occupation” Principal disability policy. Will Principal recognize that my “occupation” is my specialty/sub-specialty when I file a claim for disability benefits?
1. Can it be more difficult for physicians to collect disability benefits under Principal policies? Is it advisable to consult with a disability attorney prior to filing a Principal disability claim?
Unlike many other disability policies, Principal’s policy terms are quite complex and detailed in favor of Principal, and policy terms are modified in new templates to minimize future payouts. Instead of there being just one policy, Principal’s policies typically have numerous riders that modify/amend important definitions and provisions of the base policy, and can be nearly 60 pages long (or more), depending on how many riders you purchased.
If you have a Principal policy, you must carefully read (and re-read) each rider, making a note whenever a rider modifies other definitions and/or adds/removes requirements for collecting disability benefits. As you review, you’ll see that Principal policies are very robust, expansively detailing Principal’s extensive rights, investigatory powers and cumulative requirements for having your disability claim approved (several of which are discussed in more detail below).
When reading through your Principal policy, it may seem like filing a claim is a hopeless, uphill battle; however, it is possible to successfully file a Principal disability claim if it is approached in a well-considered and informed manner.
For example, not every investigatory power is warranted in every claim, depending on the issues at play in your particular claim. Additionally, the underlying insurance case law may have changed since your policy was drafted and there may be aspects of the policy that do not apply, or do not apply as strongly, to your situation.
Principal has a team of attorneys, actuaries and underwriters to help Principal write and re-write its policies and riders. Because most physicians are untrained in law and insurance, and particularly the niche industry of professional, own-occupation disability claims, its hard for physicians to identify and surmount factual and legal issues that may impede collection of benefits under their disability policies. Accordingly, it is best to consult with a disability attorney prior to filing a Principal claim.
Our attorneys only work within this highly specialized industry. We are thus uniquely equipped to help you understand your policy’s complex and cumulative requirements, how Principal’s proof of loss provisions apply to your specific claim, ensure that you make the right type of disability claim, submit the applicable required proof of loss, and further ensure that you and your doctors are not unknowingly taken advantage of during the claim investigation.
2. What types of physician disability claims are most often challenged/denied by Principal?
While there are certainly claims that may not require attorney involvement—for example, a disability claim due to the loss of a limb or something very serious, such as paralysis—in our experience physician claims are not always that straightforward.
Many of our clients have more nuanced conditions, such as slowly progressive musculoskeletal conditions due to degenerative disc disease. Others have conditions like a tremor, that may not prevent them from working in other jobs, but have a significant impact on their ability to work as a physician or surgeon. Others have mental health conditions (anxiety disorder, panic attacks, PTSD) that cannot be verified by a single, definitive objective test.
Obviously, if your claim is denied or you have a dispute over policy interpretation, you may need an attorney to become involved to resolve the matter. That being said, lawsuits with insurance companies are often costly, stressful, and, in some instances, can drag out over several years, all to the insurance company’s advantage. Even if you prevail, it can be an exhausting process, and companies typically appeal, which can take at least another year or more, all the while you are not getting paid benefits.
In our view, it is more prudent to approach your claim carefully from the outset and have your attorney address any concerns that Principal may have over the course of the investigation itself, so that you are not placed in a position where benefits have been cut off, you are not working and your only option is a lawsuit.
In our experience, the most common areas where complexities can arise in physician’s disability claims include:
- The timing of the claim (particularly in situations where a disabling condition is slowly progressive);
- Claims made by physicians with multiple sources of income, some of which may continue post-disability;
- Claims made by physicians who have taken an active role in office/hospital administration or are involved in non-clinical work;
- Claims where the underlying condition is difficult to diagnose or diagnosed by exclusion;
- Claims involving multiple co-morbid conditions;
- Claims involving conditions that are irregularly and unpredictably disabling;
- Claims involving pain/musculoskeletal conditions;
- Claims involving mental health conditions;
- Claims involving recommendations for or against certain treatments or surgery; and
- Claims where the physician claiming disability does not appropriately cooperate with Principal’s investigation as required by the policy and applicable law, and/or challenges Principal’s requests for written treatment plans and in-person medical exams.
3. Does Principal have true own occupation policies for physicians?
Principal does have own occupation policies; however, Principal’s base policies can limit “own occupation” coverage to “Your Occupation Period,” which may or may not last through the end of the maximum benefit period. Accordingly, it’s important to check your policy to see if you are eligible for disability benefits for longer time frames (e.g., ages 65-67 or your lifetime), or if you are only eligible for a shorter period of time (e.g., only 24-months, 5-10 years, etc.).
Additionally, Principal’s disability policies can contain “no work” provisions that only allow you to collect total disability benefits if you are not working at all—whether or not the new job is related to your prior occupation/field of practice.
If you have a Principal policy, you also need to be very careful about filing your disability claim in a timely manner, and carefully selecting the most appropriate date of disability, lining up with the coverage provisions of your policy.
If Principal determines that you stopped working and essentially “retired” before claiming disability, many Principal policies only pay total disability benefits if “You are unable to perform any of the normal activities of a retired person in good health and of like age.” This is obviously a high bar to meet, so it is important to talk to a disability attorney right away if you think are no longer able to work and think you might need to file a disability claim.
Another important clause in some Principal disability policies states that, in order to qualify for total disability, you must prove there are “no reasonable job or work site modifications which would allow You to Work.” This makes it more difficult to claim total disability, and can delay the processing of your claim if you have not tried or considered job modifications. Accordingly, before filing a claim, you should consult with an experienced disability insurance attorney regarding what is required under your policy, and how the requirements have been interpreted by courts.
Additionally, it is possible to modify the default requirements for total disability by purchasing riders that provide a better “own occupation” definition, extend the “Your Occupation Period” for the entire benefit period, and/or remove the “job modifications” language. However, this must be done on the front end, when you initially purchase your disability policy and riders.
Many physicians are not aware of that Principal’s policies contain these additional hurdles that can impede your collection of total disability benefits. These hurdles were crafted by Principal’s attorneys, and many are not impossible to surmount, but you do need to be aware of them before filing if you do not want to delay or derail your claim for disability benefits.
4. I’m a board-certified physician with what I believe is an “own occupation” Principal disability policy. Will Principal recognize that my “occupation” is my specialty/sub-specialty when I file a claim for disability benefits?
While most physicians with Principal policies have some degree of “own occupation” coverage, Principal policies tend to define “occupation” more broadly than many physicians anticipate.
For example, a typical Principal policy might define “occupation” as “the profession(s) or occupation(s), not a specific job(s) or a job with a certain employer(s), You were actively Working in (and not Retired or Unemployed from) at the start of Your Disability.” Principal policies also typically provide that “If You are Working in more than one occupation, Your Occupation includes all occupations You were actively Working in at the start of Disability.”
This can be a problem for physicians who have multiple active sources of income, have significant administrative roles at hospitals, fewer support staff/more demanding duties than are typical of a physician, or who actively operate their own practices as “business owners.”
The case of Lemons v. Principal provides an apt illustration of how Principal approaches its “occupation” analysis, and also might explain why this language has been added to Principal’s more recent policy templates.
Dr. Lemons worked primarily as an OB/GYN; however, in later years he had also worked as a claim consultant for a health insurance company and as an addiction/opioid dependence counselor. Principal denied his claim outright, finding that his occupation encompassed all three jobs and that he was not totally disabled from all three roles. Dr. Lemons argued his job was just that of an OB/GYN. The Court ultimately sided with Dr. Lemon; however, this may be in part because his policy had a singular definition of “occupation.” Since then, Principal has updated and changed its definition of occupation to be more encompassing (i.e., to include all “occupations” and “professions”).
Principal may also use this complex definition of occupation to argue that you can do some aspects of your job, and are therefore residually disabled, versus totally disabled. If you are concerned about how Principal might view your occupation, or have questions about how your policy defines “occupation,” an experienced disability attorney can help you vet these concerns and determine if/when you are able to file a total or partial disability claim under your Principal policy.
5. As a physician, how do I go about filing a disability claim with Principal?
In order to file a Principal disability claim, you must submit the proof of loss required under your Principal policy. Most Principal policies require this proof to be submitted in writing and within a certain time frame—typically within 20 or 30 days from the date of loss.
The first step is obtaining and submitting Principal’s initial proof of loss packet, which is accessible online and will consist of several questionnaires for you to complete and sign, including an investigative authorization, along with a form with questions for your doctor to complete and sign.
As you might imagine, these documents were created by attorneys and the questions directly relate to various provisions of your policy/riders that can be used to deny or limit your rights to total or partial disability benefits. Accordingly, if you are planning on having an attorney represent you on your disability claim, it is better to consult with counsel prior to submitting any proof of loss documents, to ensure that you are claiming the proper date of disability, answering the questions thoughtfully in light of your policy’s requirements, and taking other appropriate actions to enhance the likelihood of payment under your Principal policy.
6. When does Principal’s disability claim investigation begin? How far back will Principal’s investigation go? What are they looking to find?
Disability insurers, including Principal, will begin investigating your disability claim the moment you make them aware of your intent to file a claim. This will likely be when you submit your claim forms to them; however, if you call in to request claim forms or ask questions about the disability claim process, Principal will likely take note and start a file on you at that time.
If you are planning on calling Principal to request a claim packet or ask questions without an attorney, you will likely be asked important questions on a recorded line that can impact your ability to collect benefits. This is the first opportunity that Principal has to catch you off-guard, before you understand how your answers can affect your claim.
Once Principal receives your claim forms, it will commence an extremely thorough investigation of your claim. At this point, Principal will request an extensive interview (or interviews) of you, some of which may be under oath per the terms of your policy. Questions are directed to finding answers relating to your duties/occupations, your disability (e.g., treatment, doctors, pharmacies), job modifications, potential secondary motives (board complaints, lawsuits, retirement letters sent to patients), and available financial/billing information.
Principal will also be working behind the scenes to further investigate your claim, using the investigative authorization you signed to request your medical records (and perhaps even contact your doctor(s) directly), your pharmacy records, and conduct further interviews of witnesses, as necessary. They also have in-house medical doctors to review your records, which are often summarized for further review by vocational analysts. Principal’s in-house legal department is available to answer questions and recommend further investigation, which often includes having one of Principal’s in-house doctors interview one or more of your doctors.
Principal can be particularly aggressive during its initial investigation of a claim—often going to extensive lengths to limit or deny benefits. One way they do this is to look for inconsistencies or omissions on policy applications—no matter how long ago they were completed and the policy issued. Principal may dig back through years (even decades) of medical records to argue a pre-existing condition or look for records that might support a rescission lawsuit against you to void your policy, even for innocent misstatements on the policy application.
What is a rescission suit? While the specifics vary from state to state, generally speaking a rescission lawsuit is filed by an insurer against a policyholder, claiming that the policyholder made misrepresentations on the policy application (usually the health questionnaire section). In some states, the law allows your insurer to void the policy if it was issued based upon a misrepresentation in the policy application, even if that misrepresentation was innocent (i.e. there was no fraudulent intent behind the statement).
We are seeing rescission used as a more common tactic by insurers who are seeking to limit their financial liability. It is an attractive option from the insurer’s perspective because it could potentially allow them to deny a claim (and void the policy) even if the underlying disability is medically supported.
Accordingly, if you are applying for a Principal disability policy, or any disability policy, it is very important that you read the application questions carefully and answer them truthfully and accurately. At the time of filing your claim, an experienced disability insurance attorney will review your application answers in light your medical conditions, and can provide useful advice on how to proceed with your claim.
7. As a physician, what should I expect after filing a Principal disability claim? What is Principal allowed to do under my policy/riders?
Unlike other disability policies, most Principal policies have extremely robust, if not the most robust, “proof of loss” provisions compared to other companies. These provisions may state that Principal can require, among other things:
- “[e]xamination(s) of financial records performed by Us or an independent financial examiner hired by Us”;
- “a personal interview with a company representative, which may include a statement under oath”;
- “[e]vidence that reasonable job or work site modifications are not feasible”; and
- “a written evaluation and treatment plan for the condition causing Your Disability [from Your Doctor], which meets generally accepted medical standards and is satisfactory to Us.”
Principal policies further state that a failure to submit requested “proof of loss” can result in an immediate denial of your claim. This can be problematic if you are not prepared going into the claim, or if certain information is difficult to gather.
For example, objective medical evidence can be sparse or non-existent for certain types of claims, including those based on pain levels, mental health conditions, and conditions diagnosed by exclusion. Accordingly, an experienced disability insurance attorney can help you navigate the proof of loss requirements and provide necessary evidence to support your claim.
8. I am a physician with neck/back problems. Can Principal force me to have surgery?
Under most disability policies, including Principal policies, an ongoing “proof of loss” requirement is that you be continuously under the Regular Care of a Physician.
In the context of most newer Principal policies, this does not simply mean going to see your doctor on a regular basis. Rather:
REGULAR CARE BY A DOCTOR – means:
1. You are evaluated in person by a Doctor; and
2. You receive treatment appropriate for the condition causing Your Disability; and
3. Your evaluations and treatment are provided by a Doctor whose specialty is appropriate for the condition causing Your Disability; and
4. The evaluations and treatment must be at a frequency intended to return You to Full Time Work; and
5. You must pursue reasonable treatment options or recommendations to achieve maximum medical improvement.
We may require You to have Your Doctor provide Us with a written evaluation and treatment plan for the condition causing Your Disability, which meets generally accepted medical standards and is satisfactory to Us.
This is an extremely demanding care provision, in comparison to most other companies, as Principal requires that medical care received be geared towards not just treating your symptoms, but also “returning you to work.” Astoundingly, Principal can actually require that your doctor prepare a treatment plan that is not merely satisfactory to you, but also satisfactory to Principal.
This language can also result in debates over your treatment and appropriateness of your care, which often can only be resolved through litigation. If Principal and its doctors determine that you are not pursuing “reasonable treatment options or recommendations to achieve maximum medical improvement,” you may need to get attorneys and/or a judge involved to sort out the dispute. As you might imagine, its best to consult with an experienced disability attorney prior to filing your claim so that these issues can be identified and addressed prior to filing.
Another part of the “regular care” definition that merits mention is that regular care you receive by a doctor must be “in person.” If you have a chronic condition, your doctor may determine that, under normal circumstance, you do not need to be seen as often and can check in via phone or patient portals if you need something (particularly after the COVID-19 pandemic changed how many doctors operate). However, this can be problematic if you have a Principal policy because those methods of corresponding with your doctors are not “in person,” and thus present another issue that should be discussed with an attorney prior to filing your claim.
9. Why is Principal asking for my personal/practice’s financial records? Why does Principal want to talk with my accountant?
After you submit the initial claim documents, Principal will likely send a follow-up letter requesting additional records and documents. For physicians, this usually includes financial documents (such as tax returns), CPT codes, profit and loss statements, employment agreements, and practice sale documents, among other things. Whether these requests are appropriate depends on the terms of your policy and nature of your claim, and should be reviewed by an attorney before your accountant submits any information to Principal.
10. Why is Principal asking to interview me again in-person? What does Principal ask physicians in these interviews?
In addition to your initial interview and periodic phone interviews, Principal may hire a field examiner to interview you in-person. This interview typically takes place at your attorney’s office, or at your home or office if you are not represented by an attorney, and interviewers/investigators may arrive unannounced if you are not represented.
Principal may also seek to interview your co-workers and/or employers about your prior job duties, and may seek to interview your friends or family members about the impact your condition has had on your day-to-day life. Whether these types of interviews are appropriate depends on various factors, including the particular issues at play in your claim.
Field interviewers often look to catch you off guard in your home, and may seek to interview other family members present in your house. They will also be looking for information to give to private investigators who can later conduct surveillance.
Principal’s interviewers are also looking for evidence of other sources of income (e.g. do you have evidence of a lifestyle that seems above your stated income level) or whether you appear to be doing tasks that cut against the nature of your disability (for example, if you are able to sit for a prolonged interview when you’ve told Principal that sitting for extended periods greatly exacerbates your pain/musculoskeletal condition).
Unlike other disability policies, Principal policies also specifically state that Principal may require statements “under oath” during interviews. For this reason, it is very important to answer each question truthfully and thoughtfully, ideally in the presence of an experienced disability attorney.
11. Why is Principal requiring an in-person medical examination? Can I limit the scope of the exam?
Like most disability policies, Principal policies usually include a provision that allows them to request an in-person medical examination to verify any disabling conditions. While this is common practice in the industry, Principal’s policies tend to be much more all-encompassing than we see with other companies.
For example, your Principal policy might not only allow an examination, but also state that the exam “may include x-rays, blood and urine tests, psychological tests, and other tests or procedures that We deem reasonable to evaluate whether You continue to meet the definition of Disability.” Most Principal policies also “reserve the right to choose the examiners.”
In addition, Principal policies typically include a “cooperation clause” that states that you must “[f]ully cooperate with Us concerning all matters relating to this policy and any claims filed under the policy.”
This is significant because it puts the nature and scope of the exam in Principal’s hands and, if you refuse to “fully cooperate” under the policy and applicable law, Principal can deny or terminate your benefits. While this does not necessarily mean they can force you to undergo a procedure that you are not comfortable with, it does make termination/denial of benefits and the need for litigation more likely in that scenario.
12. Does Principal conduct surveillance in physician claims?
Principal is a company that conducts surveillance, including online and in-person surveillance.
Often, Principal will start with information you’ve provided during an interview or on claim forms as a starting point for surveillance. Principal’s goal is to look for reasons to deny your claim, and this can mean trying to find evidence (that they may take out of context) that you can do activities that cut against the limitations you have reported.
In addition to reviewing your verbal and written answers to its questions, Principal will also review your online presence/social media. Principal may also target your family members and friends on social media, in an attempt to get more information on you. From there, Principal moves on to in-person surveillance if they feel that is warranted.
If you have a partial disability claim with Principal or keep a passive interest in your practice, Principal will periodically review your practice’s website and social media to assess whether any posts suggest that your activity levels at the practice vary from what has been reported to Principal.
13. Why is Principal’s doctor contacting my doctor?
When you file your disability claim, Principal will typically assign a physician’s disability claim to an in-house doctor and pay that doctor to review your medical records and look for any gaps or inconsistencies.
Often, Principal will then direct their doctor to call your treating doctors in what is called a “peer to peer” call. Principal may tell you this is going to happen, but in most cases this takes place behind the scenes without your knowledge.
If your treating doctor is too busy to speak with Principal, this can be interpreted as the doctor not supporting your claim. Alternatively, Principal may determine there is insufficient medical evidence to support a claim, and then close your file due to a failure to receive responses from your treating doctor.
Conversely, if your doctor engages with Principal’s in house medical consultants, the consultants are adept at asking questions designed to elicit responses that the company can use to deny or terminate your claim, such as pushing for a return to work date. After the call, Principal’s in-house consultant may send your doctor a statement summarizing the call to sign-off on. In that instance, if your doctor is too busy to respond, Principal may take that to mean that your doctor signs-off on everything in the statement crafted by their in-house medical consultant.
The best way to prevent this from happening is to have all correspondence with your medical providers be in writing and go through a disability attorney.
This process can feel very invasive and, if you have never experienced it before, it can be hard to tell whether your insurer is taking things too far. If you are unsure whether Principal is acting appropriately, an experienced disability insurance attorney can help you to assess/limit the scope of any overly broad or improper investigation.
14. Why is Principal asking for an authorization form?
As part of the initial proof of loss packet, Principal includes an investigative authorization they require you to sign that provides them with ability to not only obtain medical records but also to contact the IRS, Social Security Administration, state taxing authority, any current or former employer, business associate or partners, and insurance companies, among others. The purpose of these requests is not only to obtain information about your medical disability, but also to establish your employment, employment history, and income, and to allow Principal access to your medical providers.
15. Can I file a physician disability claim based on mental health with Principal?
Mental-health limitation provisions are becoming much more common in disability policies, and Principal is no exception.
With Principal policies, these limitations are usually added in a rider that states “Monthly Benefits for Mental/Nervous/Substance Abuse Disability will not be paid for more than an aggregate total of 24 months during the entire time the policy is in force.”
While this is something that typically has to be added to the base policy, it is a rider that is tied to a premium discount, so we see it quite frequently when reviewing physicians’ Principal policies.
Whether something is limited or excluded depends on the underlying policy language, but generally speaking disorders classified in the Diagnostic and Statistical Manual of Mental/Nervous Disorders (DSM) are encompassed by this. Some Principal policies also state that “Mental/Nervous/Substance Abuse Disorder does not include dementia that is a result of any of the following conditions: 1. stroke; 2. head injury; 3. viral infection; or 4. Alzheimer’s disease.”
Accordingly, whether or not you will be able to file a claim, or collect benefits longer than 24 months, will depend on the wording of your policy, and the nature of your disabling condition.
Principal policies can also require that you must be under the care of a doctor specializing in psychiatry/psychology or a licensed clinical psychologist in order to collect disability benefits for a mental health claim. We’ve seen this trip-up insureds before, as some physicians suffering from depression, anxiety, or other mental health conditions may only be seeing a therapist (MSW, LCSW, LMHC, LPC) on a regular basis, or may be receiving medication from a doctor who is not specifically trained in psychology or psychiatry.
16. When should I contact an attorney about my Principal disability claim?
Physicians who are considering filing a claim for disability insurance benefits should meet with a disability attorney well-before submitting a claim.
Each disability policy has different, complex language that insurance companies may manipulate to circumscribe and restrict coverage. Before filing, physicians should make a coordinated effort, with an attorney’s assistance, to determine whether their particular claim is covered, and if so, how that claim is best presented to ensure payment.
17. Can Principal keep me from traveling?
Many physicians travel and are unaware that some Principal policies place restrictions upon their ability to continue to collect benefits if they are out of the country. For example, some Principal policies state that Principal can limit benefits to 12 months during a continuous disability “unless You reside in the United States or Canada for at least six consecutive months in each calendar year.”
We most often see these policy restrictions becoming problematic in scenarios where a sick family member or relative lives overseas and requires additional attention and care. Many physicians have family members who live in other countries and, if they are not working, can receive pressure from other family members to go and help. However, if you have a Principal policy, you should not leave the country without first reviewing your policy carefully and/or consulting with a disability insurance attorney.
18. My medical license is in jeopardy/was suspended/revoked. How will that impact my Principal disability claim?
Like many insurance companies, Principal does make a distinction between legal and factual disability. Factual disability refers to a disability that results due to injury or sickness, where the insured is unable to work. Legal disability refers to a disability that results when an individual is no longer permitted to practice. This could, for example, include the loss or suspension of a professional license. In most cases, Principal policies state that no benefits will be paid for disabilities stemming from legal disabilities.
While this may seem straightforward in principle, in practice, it can be quite nuanced. One such example is the case of Pogue v. Principal. Here, Dr. Pogue lost his license but also suffered from a nervous breakdown. Principal denied the claim, even though it acknowledged Dr. Pogue’s documented medical concerns prior to his license suspension. However, Principal cited the fact that Dr. Pogue didn’t stop working until his license was revoked. The court ultimately sided with Principal and determined Dr. Pogue could not collect benefits.
This case highlights the importance of knowing when a disability has reached the point that you need to stop practicing before you place your professional license on the line, and risk being unable to collect benefits.
The information provided above is offered purely for informational purposes. It is not intended to create or promote an attorney-client relationship, and does not constitute and should not be relied upon as legal advice.
Every claim is unique and the discussion above is only a limited summary of information that may be relevant to your claim. If you are concerned that Principal is not handling your claim fairly, an experienced disability insurance attorney can help you assess the situation and determine what options are available to you.