Glossary
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.
Actuarial Department
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.
Any Occupation
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.
Artful Neglect
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.
Authorization Form
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.
Bad Faith
Generally speaking, an insurer commits bad faith when it acts unreasonably and fails to treat the insured fairly. Each state has different requirements for bringing and establishing a bad faith claim. Depending on state law, the insurer may also have to establish that the insurance company acted knowingly or with reckless disregard as to the reasonableness of its actions. Some states also permit awards of punitive damages in insurance bad faith cases.
Beneficiary
The person or entity entitled to receive proceeds or benefits under the policy.
Benefit Offset
Many disability insurance policies contain offset provisions that reduce the amount of your monthly benefit if you receive income from other sources, such as Social Security disability or retirement, unemployment compensation, worker’s compensation, no-fault auto insurance, sick leave, severance pay, income from a new job, etc. The amount of the offset depends on the terms of the policy and the particular formula(s) used to calculate the offset.
Click here for more information about how offset provisions can reduce your monthly benefits.
Benefit Period
The maximum amount of time the insured may receive proceeds for a continuous disability. Usually benefits last until around age 65 or 67, but some policies provide for lifetime benefits.
Click here for more information about different types of benefit periods.
Business Overhead Expense Policy
This type of insurance policy covers business-related expenses (such as rent, utilities, employees’ salaries, etc.) if you become disabled and cannot work, but typically only for a short period of time—usually no more than two years.
Click here for more information about business overhead expense policies.
Care Provision
This is a provision that requires a claimant to be under the care of a doctor in order to receive disability benefits. Initially, care provisions simply required you to be seeing a doctor on a regular basis in order to retain your eligibility for benefits. However, over time, insurance companies have made care requirements much more stringent, in an effort to dictate policyholders’ medical care and force policyholder’s to undergo unwanted procedures. So, for example, if you have a newer disability policy, your policy might add the additional requirement that you must receive the “most appropriate” care for your condition in order to keep receiving your benefits. If your policy contains such a provision, and you disagree with your insurance company’s opinion of the “most appropriate” care for your condition, you may be forced to choose between submitting to an unwanted medical procedure or going to court to resolve the dispute.
Click here for more information about the different types of care provisions and how they impact your right to make your own medical decisions.
Carpal Tunnel Syndrome (CTS)
A condition where the median nerve is pinched or compressed as it travels to the wrist. This common condition can cause pain, numbness, weakness and tingling in the hands, wrists, or forearms. It is common in professions that require repetitive motions of the wrist, such as dentistry and surgery.
Click here for more information about disability claims and unsuccessful carpal tunnel surgeries.
Chronic Fatigue Syndrome
A disorder characterized by extreme fatigue, pain, cognitive difficulties, and sleep abnormalities that are not alleviated by rest, and become worse with exertion. Symptoms cannot be explained by another underlying medical condition. Diagnosis is typically based on self-reported symptoms and ruling out similar medical conditions with objective medical tests.
Click here for more information on how subjective conditions can be treated differently and/or excluded by some disability insurance policies.
Chronic Pain
Often characterized as pain lasting three to six months, or longer. Common causes of chronic pain include arthritis, migraines, nerve damage, fibromyalgia, myofascial pain syndrome, and degenerative disc disease, to name a few.
Click here for more information on how working through chronic pain could affect your ability to collect benefits.
Claim
A request by a policyholder to an insurance company for coverage based on a loss. In the context of disability insurance, claims are typically filed when an insured is either partially or totally unable to work due to sickness or injury.
Click here for more information on the claims process.
Claim Forms
When you file a claim, you will need to submit claim forms to your insurer as proof of loss and eligibility for benefits under the terms of your policy. Typically, the insurer will require signed statements from you, your treating provider(s), and your employer (if applicable) at the outset, and will likely continue to require updated statements throughout the course of your claim. While some claim forms can be found online, insurers have recently started requiring that policyholders request the forms over the phone, so that they can conduct impromptu interviews that catch many policyholders off-guard.
Click here for more information on what to expect when filing a disability claim.
Claims Department
The claims department’s role is to process and pay legitimate claims. When reaching a claims decision, the claims department is not supposed to consider company profitability.
Click here for more information about the four major functions of an insurance company.
Consequential Damages
Consequential damages is a legal term that, in the context of a disability insurance lawsuit, refers to the financial harm to the insured that results from the insurer’s denial or termination of benefits.
