You buy long term disability insurance hoping you never have to use it. But there may come a time when you’ll need the benefits you’ve paid for.
In fact, estimates range from 25 percent to 30 percent of American workers will endure some type of temporary disability during their careers that will prevent or limit them from working.
If you sustain a disabling illness or injury, you should contact the insurance company or your agent as soon as possible to get the process moving. To approve your claim, insurers will require you to complete a series of forms, which they will send to you once you make that initial contact.
Here are five important things to keep in mind if ever have to file a claim for disability insurance benefits.
You should review your policy at least annually to ensure it will provide adequate coverage. This is also a good exercise to be reminded of all the provisions your policy contains. You can either review the policy on your own or with you agent.
If you encounter a situation where you may have to file a claim, you will want to know the following information that could impact whether you qualify for full benefits:
- What is the policy’s definition of disability? What constitutes disability depends on the policy. Some are known as own-occupation, and will pay benefits if an injury prevents you from working at your normal job, but allows you to do other types of work. You should understand whether the injury or illness you have incurred is serious enough to warrant disability benefits based on the policy language.
- Does your policy cover residual or partial disability? Residual disability is generally defined as being able to perform one or more, but not all, of the material and substantial duties of your occupation, or unable to work in your occupation for a set percentage of time. Residual disability benefits are triggered when the insured suffers an established percentage of income loss because of their disability. The benefit you receive under the provision is typically proportionate to your lost earning power.
- What exclusions and limitations does the policy contain? Disability insurers typically will not pay claims for injury or illness resulting from self-inflicted acts, criminal activities, acts of war, civil disobedience or rebellion, and from operating a motor vehicle while intoxicated. You may also have additional exclusions that are specific to your underwriting that restrict coverage for claims resulting from or related to a preexisting medical condition, or from participation in a potentially hazardous activity.
Insurers often stipulate a timeframe when you must notify them of a disability claim. A typical deadline is 20 to 30 days from the time you incur the disability. This information should be included in your policy - if you can’t find it, you should contact the insurance company right away.
Once you’ve reported, the insurance company should send you claim forms. This step also may have a strict deadline for when you must return the forms with all accompanying documentation.
Any missed deadlines can adversely impact your ability to collect benefits from the insurance company.
In order to collect benefits, you will have to prove to the insurance company that
- you have suffered a disabling accident or illness; and
- that the disabling event will adversely impact your ability to practice medicine
Insurers will require a written statement from your treating physician. This document will detail the nature of your injury or illness, describe the treatment plan, and verify that you either cannot work at all or will be limited in what tasks you perform or how much time you can work.
The insurance company will also need medical records, including medical history, physician notes, MRIs, x-rays, and lab reports.
As you are no doubt aware, physicians are very busy and this task can easily fall through the cracks, which can cause you to miss a filing deadline. Stay in regular contact with your doctor to ensure timely submission of this information.
In addition, you and/or a family member/representative should review all of this documentation with your physician before it is submitted to the insurance company.
Make sure you make and keep hard copies of any forms you provide to the insurance company. Note the date and time of each letter, email, and call between you and the company, as well as who initiated contact. Also write down anything that was discussed over the phone between you and your agent or an insurance company representative.
Keep these records together in a safe place along with your financial and medical records.
Disability insurance companies sometimes deny claims for a variety of reasons. If this occurs, you may have go through the legal process — such as mediation or civil court — to get the insurer to pay claims.
Anything you’ve said publicly or to a third party could be used as evidence in favor of the insurance company. Therefore, you should limit discussions about your disability and you should avoid posting specific information on social media or public forums.
Perhaps more importantly, you should ONLY provide the insurance company with the specific information they requested. Be honest at all times, but keep your answers short and to the point. Do not offer additional explanations or details unless it is specifically asked of you.
As they say in the legal system, anything you say or write can be used against you, even if it was misinterpreted.
Colin is the Founder & CEO of LeverageRx, an online lending and insurance marketplace for doctors. Colin has over 10 years of experience in financial services and is a licensed life and health insurance agent.