Long Term Disability Insurance Fraud

Policyholders purchase long-term disability insurance to protect themselves in the event they become disabled and can no longer carry out their job duties. Unfortunately, some long-term disability (LTD) policyholders have their disability claims improperly denied. Policyholders who have their long-term disability claim denied can appeal the decision, but should speak with an attorney first, to ensure their rights are protected throughout the process.

Long-term disability is supposed to protect policyholders in case they become sick, injured, or otherwise disabled for an extended period of time and are no longer able to carry out their work-related duties. When that happens, policyholders file a long-term disability claim to have their benefits begin. Long-term disability plans often begin to provide benefits after a policyholder has been unable for work for six months, and the LTD plans typically pay about 60-80% of the policyholder's pre-disability earnings. LTD plans differ according to the terms of the plan, so each individual's plan needs to be reviewed accordingly. Unfortunately, some long-term disability claimants find that their claim is denied or is originally approved only to be terminated later.

Often when long-term disability is discussed, it is mentioned alongside "ERISA." ERISA, the acronym for "Employee Retirement Income Security Act," is a federal law that was put in place to protect workers' pension plans. ERISA was expanded to also apply to employer-provided long-term disability plans. If you've purchased a long-term disability insurance plan on your own--i.e., not through your employer benefits plan--then ERISA law typically does not apply; state law governs individual long-term disability insurance plans.

Because of this, it is best to seek the assistance of a long-term disability attorney to help guide you through any issues you might face as you file your disability claim. Also, while ERISA laws were enacted to protect workers' rights, unfortunately, ERISA is known to favor the insurance companies.

Depending on the policyholder's circumstances, the policyholder may have to file an appeal before filing a lawsuit. If the disability insurance is purchased through an employer, the insurance is governed by ERISA. In such cases, any denials must first be appealed with the insurer. The appeals process must be exhausted before a lawsuit can be filed.

The administrative appeal, however, involves a great deal of paperwork, and you may be required to file one or more of these appeals. The paperwork filed in support of the appeal will be the only evidence considered for both the appeal and—if the appeal is denied—the lawsuit. All evidence—including medical records, expert opinions, and other supporting documentation—must be included in the administrative appeal or it will not be considered by the judge in a subsequent lawsuit.

If your long-term disability claim has been denied, you should first request a complete copy of your claims file from the plan administrator. Through ERISA, your insurance company is required to provide you with a copy of your claim file at no cost. This information is important to have in order for you to be able to identify and include additional evidence in your claim file. While the administrative appeal(s) needs to be exhausted according to ERISA, it is still wise to speak with a long-term disability lawyer to ensure you are following the LTD claim appeal process correctly, meeting your deadline dates, and adding as much supportive evidence to your claim file as possible.

Note, if the insurance is purchased directly by the policyholder, and not obtained through an employer's benefits plan, the policyholder can file a lawsuit without filing an appeal of the denial.

Policyholders have their insurance claims denied for many reasons. Sometimes the insurance company does not have an accurate picture of the claimant's work duties and believes the claimant can go back work. The insurance company might also claim that the policyholder is not as disabled as he or she claims, or that the claimed disability is not covered by the policy (this is sometimes the case with conditions such as fibromyalgia).

In other cases, insurance companies may claim not to have received important documentation or not received information from policyholder's medical care provider. Or the insurance company might claim the injury is pre-existing, there is no objective medical evidence for the claim, or that there is no injury at all.

One of the most common long-term disability denials, however, happens when the insurer claims that the LTD claim was filed too late. It is of utmost importance to ensure all key filing dates are met when filing your LTD claim.

Insurance companies are required to pay claims in good faith—meaning the claims must be paid willingly, promptly, and properly. All denials must be made for legitimate reasons. When companies deny insurance claims for invalid reasons—such as to make quotas or protect profits—or otherwise breach their covenant of good faith and fair dealing, they are committing bad faith insurance.

Bad faith insurance can also involve failing to promptly pay or investigate an insurance claim, not properly disclosing policy benefits, or failing to provide benefits as written in the insurance policy.

All insurance companies have a claims procedure and have legitimate reasons for denying long-term disability claims.

Among the long-term disability insurance companies are:

• Unum (previously called Unum Provident and First Unum), has faced lawsuits alleging improperly denying legitimate claims;
  
• Aetna;
  
• Cigna, which in 2013 reached a regulatory settlement with five states who alleged the company was improperly handling claims;
  
• AIG;
  
• LINA (Life Insurance Company of North America, also operating under the CIGNA banner);
  
• Allstate;
  
• Colonial Life & Accident Insurance Company;
  
• The Guardian Life Insurance Company of America;
  
• Liberty Mutual
  
• John Hancock Life Insurance Company;
  
• New York Life Insurance Company;
  
• MetLife (Metropolitan Life Insurance Company;
  
• Prudential;
  
• Penn Mutual.
  

Just because an insurance company denies a claim for long-term disability insurance doesn't mean the policyholder has an invalid claim. There are many reasons for denying a claim that go beyond the legitimacy of the illness or injury. When claims are denied, policyholders have a right to have that decision reviewed. An experienced attorney can help with the insurance claims process, which can be long and complicated.

Register your Long Term Care Disability Insurance Complaint

If you have had a long term disability insurance policy falsely represented to you, or been denied a long term care disability insurance claim, you may qualify for damages or remedies that may be awarded in a long term disability fraud insurance lawsuit. Please click the link below to submit your complaint to an insurance lawyer for a free evaluation.
Last updated on Jun-19-17