LTD: Helping claimants when they are most vulnerable

This is the final installment of a three-part series. View part one here and part two here. An insurance agent who offers group benefits and/or individual disability benefits will experience the time-consuming and difficult task of helping clients make benefit claims. While it’s tough, it’s also a source of client appreciation for your efforts as […]

By Harold Geller | July 30, 2009 | Last updated on July 30, 2009
5 min read
  • If it’s a group policy, a plan sponsor may inform the agent;
  • A client may proactively call the agent to inform him or her of an illness or injury; or
  • An insurance agent who keeps in regular contact with clients may learn of circumstances giving rise to a claim.

Even the most sophisticated client can be stymied by the process for making an LTD benefits claim. The agent should promptly provide a client with a copy of the insurance policy, any explanatory materials related to that policy and the claims process, and review the key portions of the policy and materials with the client.

For starters, the client needs to understand the scope of insurance coverage as defined in the policy. There will be a definition of “total disability” and the policy may also have definitions of “partial disability” and “re-occurring disability.” And, there will be other key words and terms defined in the policy that limit payment of benefits only to injuries and illnesses which fit within the defined extent of incapacity.

The insurer can’t be relied upon to provide meaningful clarifications of words and terms at the time of claim. Frequently, insurers respond to client enquiries in ways that favour the insurer’s interests (and result in non-payment of benefits). So, while an insurer’s response may be informative, if it’s contrary to your client’s interest take great care. (Insurers routinely reverse their initial positions in legal settlements and lose such issues in court decisions.)

Completing the statement

When completing the Claimant’s Statement, make sure your client fully describes the nature and extent of all aspects of the illness or injury. He or she should also recount all the events surrounding the accident or illness.

Often claimants minimize the extent of an illness or disability and its impact on their daily activities. For example, a claimant with MS or a heart condition may fail to make note of the psychological impact of investigation, diagnosis and treatment on his or her life.

I’ve rarely seen a client experience harrowing health challenges and somehow avoid at least a modicum of depression. But for some reason, their Claimant’s Statements often fail to report the loss of energy, loss of sleep, and changes of mood they’ve experienced. The problem with these omissions is that these reports are later used as evidence of an independent diagnosis, and affect the outcome of the disability benefit claim. That’s why a holistic view of the client’s health should be reported, rather than just a minimalist diagnosis.

The client must be his or her own advocate to the attending doctor. The doctor should promptly and fully complete the Attending Physician’s Statement (APS) and make reference and use of the wording of the LTD policy. This must include an unequivocal statement (using the policy wording) of the claimant’s “total disability,” if appropriate. The doctor should avoid wording that seems over-the-top or critical of the insurer, and stick to simple and clear statements that reference reported, observed and tested symptoms and diagnosis.

I recently represented a client who was in advanced stages of an undeniably terminal illness. Due to her failure or inability to complete the Claimant’s Statement in detail, or the failure of the doctor to complete a detailed and relevant APS, her claim was denied for almost two years.

During that time, her suffering was increased by denial of the peace of mind her total disability benefits would have provided. For almost two years, until her claim was paid, she relied on her limited savings and equity, friends, and finally charity to take care of her and her two daughters. Fortunately, with advocacy and the collection of supplemental records, she was eventually fully compensated for the denial by the insurer.

A claimant shouldn’t take no for an answer, unless that answer makes sense. All of my clients who were initially denied an LTD benefit claim received substantial or complete compensation once I got involved. While this track record isn’t the last word on the use of lawyers, I do think a knowledgeable professional can make a difference; if only to help a client and his or her advisor determine when a claim has true merit.

Most insurance policies have deadlines to file claims and LTD is no different. Policies generally require claims be commenced within two years of denial of benefits, and clients who have no income require immediate help.

Agent liability

Keep records of when policies were delivered and premiums paid, because the beginning or end of coverage is often significant to a successful claims process.

If medical evidence is required for the application, an applicant must confirm that his or her health was unchanged prior to completion of the policy delivery. In both the application and delivery phase, the applicant should be specifically informed, in either plain English or French, that all questions related to underwriting must be answered fully – or the applicant risks a the policy being voided if a claim is assessed. A denial for non-disclosure is a disaster.

Agents should also keep records of when they provided this advice to clients, and consider probing clients to ensure complete answers are provided. Further, they should consider supplementing the application with an Agent’s Letter detailing any additional information learned in their investigations.

If you believe a client would be better served by more comprehensive coverage — including higher benefit dollar value or more inclusive wording — and the client rejects that advice, then make note of this and get their instructions in writing. Ideally, you should also confirm both your advice and your understanding of the client’s response in writing to your client.

Should you ever receive notice of a missed premium payment, don’t delay. Ensure the client makes the payment promptly and don’t rely on the insurer to provide notice to your client. Make every effort to contact your client and find out why the payment was missed. Explain the consequences of non-payment, and the options for curing this. Make notes and confirm in writing that you’ve covered this off. What if a client couldn’t pay because he was disabled, hadn’t informed you, and hadn’t made a claim.

While this sounds unlikely, I’ve worked on just such a case. Don’t risk becoming your client’s insurer for failing to do your job as their agent of record.

Harold Geller is an expert on legal issues affecting financial intermediaries and their clients. As part of this service, he helps long-term disability claimants assess their claims and, if appropriate, present their claims to insurers. Harold is also a well-known industry commentator, a CE provider and principal of Geller & Associates, the long-term disability division of Doucet McBride LLP.

(07/30/09)

Harold Geller

This is the final installment of a three-part series. View part one here and part two here.

An insurance agent who offers group benefits and/or individual disability benefits will experience the time-consuming and difficult task of helping clients make benefit claims. While it’s tough, it’s also a source of client appreciation for your efforts as an agent.

The claims process can appear Byzantine. And it’s further complicated by procedure-driven format which requires specialized knowledge of policy interpretation and legal principles. But it’s times like these, when the insured is most vulnerable and least able to advocate for his or her own needs, that they need an advisor who can help them press a benefits claim.

Potential claims come to an agent’s attention in several ways:

  • If it’s a group policy, a plan sponsor may inform the agent;
  • A client may proactively call the agent to inform him or her of an illness or injury; or
  • An insurance agent who keeps in regular contact with clients may learn of circumstances giving rise to a claim.

Even the most sophisticated client can be stymied by the process for making an LTD benefits claim. The agent should promptly provide a client with a copy of the insurance policy, any explanatory materials related to that policy and the claims process, and review the key portions of the policy and materials with the client.

For starters, the client needs to understand the scope of insurance coverage as defined in the policy. There will be a definition of “total disability” and the policy may also have definitions of “partial disability” and “re-occurring disability.” And, there will be other key words and terms defined in the policy that limit payment of benefits only to injuries and illnesses which fit within the defined extent of incapacity.

The insurer can’t be relied upon to provide meaningful clarifications of words and terms at the time of claim. Frequently, insurers respond to client enquiries in ways that favour the insurer’s interests (and result in non-payment of benefits). So, while an insurer’s response may be informative, if it’s contrary to your client’s interest take great care. (Insurers routinely reverse their initial positions in legal settlements and lose such issues in court decisions.)

Completing the statement

When completing the Claimant’s Statement, make sure your client fully describes the nature and extent of all aspects of the illness or injury. He or she should also recount all the events surrounding the accident or illness.

Often claimants minimize the extent of an illness or disability and its impact on their daily activities. For example, a claimant with MS or a heart condition may fail to make note of the psychological impact of investigation, diagnosis and treatment on his or her life.

I’ve rarely seen a client experience harrowing health challenges and somehow avoid at least a modicum of depression. But for some reason, their Claimant’s Statements often fail to report the loss of energy, loss of sleep, and changes of mood they’ve experienced. The problem with these omissions is that these reports are later used as evidence of an independent diagnosis, and affect the outcome of the disability benefit claim. That’s why a holistic view of the client’s health should be reported, rather than just a minimalist diagnosis.

The client must be his or her own advocate to the attending doctor. The doctor should promptly and fully complete the Attending Physician’s Statement (APS) and make reference and use of the wording of the LTD policy. This must include an unequivocal statement (using the policy wording) of the claimant’s “total disability,” if appropriate. The doctor should avoid wording that seems over-the-top or critical of the insurer, and stick to simple and clear statements that reference reported, observed and tested symptoms and diagnosis.

I recently represented a client who was in advanced stages of an undeniably terminal illness. Due to her failure or inability to complete the Claimant’s Statement in detail, or the failure of the doctor to complete a detailed and relevant APS, her claim was denied for almost two years.

During that time, her suffering was increased by denial of the peace of mind her total disability benefits would have provided. For almost two years, until her claim was paid, she relied on her limited savings and equity, friends, and finally charity to take care of her and her two daughters. Fortunately, with advocacy and the collection of supplemental records, she was eventually fully compensated for the denial by the insurer.

A claimant shouldn’t take no for an answer, unless that answer makes sense. All of my clients who were initially denied an LTD benefit claim received substantial or complete compensation once I got involved. While this track record isn’t the last word on the use of lawyers, I do think a knowledgeable professional can make a difference; if only to help a client and his or her advisor determine when a claim has true merit.

Most insurance policies have deadlines to file claims and LTD is no different. Policies generally require claims be commenced within two years of denial of benefits, and clients who have no income require immediate help.

Agent liability

Keep records of when policies were delivered and premiums paid, because the beginning or end of coverage is often significant to a successful claims process.

If medical evidence is required for the application, an applicant must confirm that his or her health was unchanged prior to completion of the policy delivery. In both the application and delivery phase, the applicant should be specifically informed, in either plain English or French, that all questions related to underwriting must be answered fully – or the applicant risks a the policy being voided if a claim is assessed. A denial for non-disclosure is a disaster.

Agents should also keep records of when they provided this advice to clients, and consider probing clients to ensure complete answers are provided. Further, they should consider supplementing the application with an Agent’s Letter detailing any additional information learned in their investigations.

If you believe a client would be better served by more comprehensive coverage — including higher benefit dollar value or more inclusive wording — and the client rejects that advice, then make note of this and get their instructions in writing. Ideally, you should also confirm both your advice and your understanding of the client’s response in writing to your client.

Should you ever receive notice of a missed premium payment, don’t delay. Ensure the client makes the payment promptly and don’t rely on the insurer to provide notice to your client. Make every effort to contact your client and find out why the payment was missed. Explain the consequences of non-payment, and the options for curing this. Make notes and confirm in writing that you’ve covered this off. What if a client couldn’t pay because he was disabled, hadn’t informed you, and hadn’t made a claim.

While this sounds unlikely, I’ve worked on just such a case. Don’t risk becoming your client’s insurer for failing to do your job as their agent of record.

Harold Geller is an expert on legal issues affecting financial intermediaries and their clients. As part of this service, he helps long-term disability claimants assess their claims and, if appropriate, present their claims to insurers. Harold is also a well-known industry commentator, a CE provider and principal of Geller & Associates, the long-term disability division of Doucet McBride LLP.

(07/30/09)

This is the final installment of a three-part series. View part one here and part two here.

An insurance agent who offers group benefits and/or individual disability benefits will experience the time-consuming and difficult task of helping clients make benefit claims. While it’s tough, it’s also a source of client appreciation for your efforts as an agent.

The claims process can appear Byzantine. And it’s further complicated by procedure-driven format which requires specialized knowledge of policy interpretation and legal principles. But it’s times like these, when the insured is most vulnerable and least able to advocate for his or her own needs, that they need an advisor who can help them press a benefits claim.

Potential claims come to an agent’s attention in several ways:

  • If it’s a group policy, a plan sponsor may inform the agent;
  • A client may proactively call the agent to inform him or her of an illness or injury; or
  • An insurance agent who keeps in regular contact with clients may learn of circumstances giving rise to a claim.

Even the most sophisticated client can be stymied by the process for making an LTD benefits claim. The agent should promptly provide a client with a copy of the insurance policy, any explanatory materials related to that policy and the claims process, and review the key portions of the policy and materials with the client.

For starters, the client needs to understand the scope of insurance coverage as defined in the policy. There will be a definition of “total disability” and the policy may also have definitions of “partial disability” and “re-occurring disability.” And, there will be other key words and terms defined in the policy that limit payment of benefits only to injuries and illnesses which fit within the defined extent of incapacity.

The insurer can’t be relied upon to provide meaningful clarifications of words and terms at the time of claim. Frequently, insurers respond to client enquiries in ways that favour the insurer’s interests (and result in non-payment of benefits). So, while an insurer’s response may be informative, if it’s contrary to your client’s interest take great care. (Insurers routinely reverse their initial positions in legal settlements and lose such issues in court decisions.)

Completing the statement

When completing the Claimant’s Statement, make sure your client fully describes the nature and extent of all aspects of the illness or injury. He or she should also recount all the events surrounding the accident or illness.

Often claimants minimize the extent of an illness or disability and its impact on their daily activities. For example, a claimant with MS or a heart condition may fail to make note of the psychological impact of investigation, diagnosis and treatment on his or her life.

I’ve rarely seen a client experience harrowing health challenges and somehow avoid at least a modicum of depression. But for some reason, their Claimant’s Statements often fail to report the loss of energy, loss of sleep, and changes of mood they’ve experienced. The problem with these omissions is that these reports are later used as evidence of an independent diagnosis, and affect the outcome of the disability benefit claim. That’s why a holistic view of the client’s health should be reported, rather than just a minimalist diagnosis.

The client must be his or her own advocate to the attending doctor. The doctor should promptly and fully complete the Attending Physician’s Statement (APS) and make reference and use of the wording of the LTD policy. This must include an unequivocal statement (using the policy wording) of the claimant’s “total disability,” if appropriate. The doctor should avoid wording that seems over-the-top or critical of the insurer, and stick to simple and clear statements that reference reported, observed and tested symptoms and diagnosis.

I recently represented a client who was in advanced stages of an undeniably terminal illness. Due to her failure or inability to complete the Claimant’s Statement in detail, or the failure of the doctor to complete a detailed and relevant APS, her claim was denied for almost two years.

During that time, her suffering was increased by denial of the peace of mind her total disability benefits would have provided. For almost two years, until her claim was paid, she relied on her limited savings and equity, friends, and finally charity to take care of her and her two daughters. Fortunately, with advocacy and the collection of supplemental records, she was eventually fully compensated for the denial by the insurer.

A claimant shouldn’t take no for an answer, unless that answer makes sense. All of my clients who were initially denied an LTD benefit claim received substantial or complete compensation once I got involved. While this track record isn’t the last word on the use of lawyers, I do think a knowledgeable professional can make a difference; if only to help a client and his or her advisor determine when a claim has true merit.

Most insurance policies have deadlines to file claims and LTD is no different. Policies generally require claims be commenced within two years of denial of benefits, and clients who have no income require immediate help.

Agent liability

Keep records of when policies were delivered and premiums paid, because the beginning or end of coverage is often significant to a successful claims process.

If medical evidence is required for the application, an applicant must confirm that his or her health was unchanged prior to completion of the policy delivery. In both the application and delivery phase, the applicant should be specifically informed, in either plain English or French, that all questions related to underwriting must be answered fully – or the applicant risks a the policy being voided if a claim is assessed. A denial for non-disclosure is a disaster.

Agents should also keep records of when they provided this advice to clients, and consider probing clients to ensure complete answers are provided. Further, they should consider supplementing the application with an Agent’s Letter detailing any additional information learned in their investigations.

If you believe a client would be better served by more comprehensive coverage — including higher benefit dollar value or more inclusive wording — and the client rejects that advice, then make note of this and get their instructions in writing. Ideally, you should also confirm both your advice and your understanding of the client’s response in writing to your client.

Should you ever receive notice of a missed premium payment, don’t delay. Ensure the client makes the payment promptly and don’t rely on the insurer to provide notice to your client. Make every effort to contact your client and find out why the payment was missed. Explain the consequences of non-payment, and the options for curing this. Make notes and confirm in writing that you’ve covered this off. What if a client couldn’t pay because he was disabled, hadn’t informed you, and hadn’t made a claim.

While this sounds unlikely, I’ve worked on just such a case. Don’t risk becoming your client’s insurer for failing to do your job as their agent of record.

Harold Geller is an expert on legal issues affecting financial intermediaries and their clients. As part of this service, he helps long-term disability claimants assess their claims and, if appropriate, present their claims to insurers. Harold is also a well-known industry commentator, a CE provider and principal of Geller & Associates, the long-term disability division of Doucet McBride LLP.

(07/30/09)