Disability Insurance: A Blessing or a Burden?

Insurance is meant to protect a person should the unthinkable occur. However, insurance corporations are expected to turn a large profit and often times denying coverage is a way to gain some of those profits. That, in my mind, is a burden no individual should bear.
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A few years ago, journalist Chris Cuomo presented an exposé for Good Morning America about a disability insurance company that denied policies after using video surveillance. The video surveillance showed no discrediting activity. Many individuals have experienced this scenario, which begs the question are disability insurance policies a blessing or a burden?

Numerous companies offer benefit packages that include short term and long term disability policies. These policies are looked on as a perk the company is proud to offer, and the employee is happy to accept. Most of us, when we begin a job, are not thinking about becoming disabled. Therefore, when we see these disability benefit packages, we do not take the time to research them. The assumption is that these policies will be there should we need them.

One piece of information that employees are unaware of is that disability Insurance companies are not regulated in the same way other health insurance companies are regulated. The Patient Protection and Affordable Care Act, for example, does not have an impact on how disability insurance companies conduct business. Also, weather you have a private or group disability policy makes a difference should you need to pursue an unwarranted denial.

The hard truth, from my research, is disability insurance companies have a bevy of loopholes at their disposal, should they choose to use them. For group policies, there are strict time lines for filing an appeal that are not mentioned when a denial letter is presented. If you are a person who does not know about ERISA law, you may miss the 60 day appeal deadline required. If that deadline is missed, and if your appeal is not complete, there is no further recourse against the denial. The companies know that if they deny a claim that is not worth a significant amount of money, a law firm will likely not take up the cause. Harassment or emotional distress situations can not be included should a case be brought before a judge. The only information that judge is able to look at from you, is what you have submitted to the company at the time of appeal. There are no jury trials. This leaves plenty of room for poor treatment of honest claimants.

Disability insurance companies require a claimant to sign authorization forms that legally allow the company to pursue many activities that would otherwise be against HIPPA privacy law. When reading the authorization form the purpose may seem clear; to gather pertinent disability medical records. However, I am aware of at least one instance when that same authorization form was used by a private investigator, hired by the insurance company, to gain access to a patient's nurse in order to identify the claimant. Information gained from these authorization forms and totally unrelated to a person's disability may then be used in a denial letter. The tactics in place to force a patient to sign this form are simple. The claimant either signs the form to comply with the policy, or the policy is cancelled.

A very interesting piece of information is that even though Social Security, your doctors, and your job may consider you unable to return to work, disability insurance companies may disagree. There are different standards required to obtain and maintain a disability policy through these corporations. Often times the wording is confusing for even your own doctors when they fill out required paperwork. Any mistake, or potential misrepresentation can be used to deny benefits to a disabled person.

Many policy holders expect once they are approved for disability, and submit all of the required updates, that their policy will not be cancelled. Unfortunately, that is not the case. What we forget as consumers, is that disability insurance companies are like any other corporations; they trade on the stock market, are beholden to investors, and are always searching for ways to trim expenses. Regrettably, some companies have become less focused on honoring their contracts, and more focused on finding ways around their contracts in order to improve their bottom line.

Disability can be very costly as well as emotionally and physically draining. Fighting with an insurance company can be all of those things as well. Many times policies are cancelled with the expectation that the disabled individual will not fight back. In my mind, this is not a good business practice. However, because our laws are set up as they are, these companies can and do legally deny coverage to disabled individuals on a regular basis.

Insurance is meant to protect a person should the unthinkable occur. In that way, it gives us peace of mind, and it is a blessing. However, insurance corporations are expected to turn a large profit and often times denying coverage is a way to gain some of those profits. That, in my mind, is a burden no individual should bear.

If you are struggling with a disability insurance denial, please contact an attorney who specializes in disability insurance. Make sure you contact them in a timely manor so deadlines are not accidentally missed. Talk with your legislators and know your rights.

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