Making a Claim Under a Disability Insurance Policy

Making a Claim for Benefits under a Disability Insurance Policy

Disability insurance policies provide supplemental income to persons who are unable to work because of injury or disease. These policies come in many varieties. Some are purchased directly by individuals, who then pay periodic premiums for coverage themselves. The rights created by these policies are private and are largely governed by contract law.

Other disability policies are provided by employers and are funded, either completely or partially, as a work-related benefit. Often, employer-purchased policies are group plans. The rights created by these policies are typically controlled by a comprehensive Federal statute known as the Employee Income Retirement Security Act or ERISA.

This article offers some practical advice for claimants pursuing benefits under either type of disability policy.

Review your policy. The practical starting point in bringing any insurance claim is the policy language itself. Before filing a claim, consult the applicable policy first. One might think that a person with SCI/D would have little difficulty establishing the existence of a disability and an entitlement to benefits. Unfortunately, that is not necessarily the case. Insurance policies contain a number of terms and conditions which adjusters may invoke to deny coverage if a claimant fails to comply. Some policies may exclude coverage for spinal cord disease on the basis that it was "pre-existing," namely, that it constituted a condition for which medical treatment had been sought within a specified time (usually 12 months) before filing the claim. Other policies may deny benefits even if you are totally disabled from your usual occupation as long as there are other jobs that you are qualified to do.

Act promptly. Most disability policies impose filing deadlines. Typically, these deadlines are strictly construed, despite how traumatic or distracting a new injury may be for the claimant. Copies of the policy itself and any necessary application forms should be obtained as soon as practically possible. Either the claimant or a trusted family member or friend should contact the insurance broker or agent from whom a personal or private policy was purchased. If the policy was instead bought by an employer, the human resources department should be contacted.

Gather and submit all related medical records. Any claim for disability benefits should be supported with the complete medical file regarding treatment. These records form the basis on which eligibility is determined and upon which an appeal would be reviewed, if necessary. Make certain that the attending physician recognizes the standards used for assessing the nature and extent of the disability involved and specifically addresses them when preparing any reports for the insurer.

Strive for accuracy. Be as thorough and complete as possible in the application form. Failure to disclose certain medical information could be perceived as a lack of cooperation and could trigger a defense under the policy. Do not exaggerate any details or speculate about your prognosis. The insurer may refuse to pay if it discovers any arguable misrepresentations in the claim.

Be aware of your appellate rights. Do not consider a denial of benefits as necessarily representing the "last word" on your claim. If your claim is denied, ask the insurer the precise reason(s) why and request a copy of any standards or guidelines used in making the decision. Check the appellate rights and deadlines specified in your policy. Many policies require claimants to first pursue an internal, administrative appeal with the insurer before bringing an action in court. The appellate procedures and remedies that may ultimately apply at common law or under ERISA are very different, and a discussion of these factors exceeds the scope of this article. It may be appropriate and beneficial to consult with an attorney at this stage, if you have not previously done so.