Disability insurers in their promotional materials tout how they can be relied to provide a steady source of income to disabled persons. This is anything but true. As you will learn, disability insurers will fabricate reasons for denying disability claims for their own economic benefit even when there is no change, or worse, a decline in a disabled insured’s health condition.
When is it done? Periodically, the disability insurers will review ongoing claim payments as part of a preplanned effort to remove insureds from their disability roll. This process at Unum as called the “scrubbing” of files. I prefer the prefer the phrase of “thinning the heard.” In my practice, I have seen claims of greater than ten years of duration which have been denied upon the flimsiest of reasons.
Why is this done? The removal of claims from payment allows insurers to reduce their claim reserves (monies which must be retained in a future pool for ongoing payment purposes). This allows insures not only to create a profit by retaining payments which otherwise would be spent on ongoing claims, but also frees future capital for investment, dividend payment, or other bookkeeping manipulation purposes.
How do they do it? Rather easily. In some cases, the disability insurer will send out biased functional capacity forms to treatment providers. These forms tend to not allow for findings which allow for less than sedentary (mostly sitting) employment and ask very limited and vague questions designed to produce findings which can be characterized as permitting work. In other cases, a paper medical review is undertaken by an in-house nurse or physician and then is sent to the treatment provider for agreement. Other times, an in-house physician will make a “peer contact” by calling your treatment provider and eliciting limited agreements with the insurer concerning medical findings which, in turn, will be used against the insurer to procure a denial of the disability claim.
Does this work? Yes, surprisingly. Many disabled persons are not in a proper frame of mind to fight an insurer and do not want to involve themselves with having to obtain an experienced attorney to fight for their disability benefits. Some disability insurers will be even more unscrupulous in their conduct by denying claims of older insureds who are only a year or so away from the termination date for their benefits. This will prevent retention of an attorney on a contingency basis and makes it difficult for the insured to pay for legal assistance due to their own financial constraints caused by the insurer’s withholding of their money.
What do I do to prevent this? Make sure to keep your treatment providers advised of your disability benefits claim and for them to send you any correspondence sent by the insurer. The insurers will never send a copy of this correspondence to you and you will need to intercept these letters. The insurers may also request an interview with you. These tend to be extended affairs which they want to conduct in your own home so as to make you comfortable and get you to make many statements or permit observations which will be held against you. For this reason, never allow these people in your home. They have no right to coerce the interview in your residence and you can meet them in a public place (restaurant, coffee house, library, etc.). Do not permit an interview that lasts more than an hour as they will keep going and try to coerce you to extend the interview in hopes of your making admissions or contradictions that they will use to impugn your credibility and terminate your claim.
Of course, the best solution is to contact an attorney with experience in these matters. I only permit one hour interviews which are held in my office. This location makes the insurer representative uncomfortable and allows me to limit the time of the interview and guide the content therein.
All in all, you just can’t depend on a disability insurer and need to be vigilant concerning their conduct in order to avoid an unfair denial of your disability claim.