This Guy Bought Disability Insurance . . .

Have you heard the one about the guy who bought disability insurance?  It goes like this . . . A guy goes into an insurance office to purchase a disability policy.  The agent has him sign all of the appropriate paperwork, and the guy assumes the disability policy will be there for him if and when he ever needs it.  He figures if he plays by the rules his insurance company will too. Here's the (unfortunate) punch line: when it comes to paying out benefits, many insurance companies constantly move the goal post.  In other words, there are no rules.  Many times, it's a crap shoot.

Thanks, in large part to the McCarran-Ferguson Act of 1945, insurance companies are not federally regulated.  Rather, your disability policy is governed by the state in which it was issued.  And, each state has wide latitude in regulating insurance companies.  That and the standard by which your claim is judged too often puts you at a disadvantage in disability legal disputes.

The Standard of (Your Case) Review

The Standard of Review is your burden in Court.  Regarding a private/individual policy that you have purchased for yourself, more than 50% of the evidence you present in your disability case must be on your side - or must prove your case.

For ERISA plans (disability plans that are provided by your employer), the Standard of Review is usually far more difficult.  In most ERISA disability cases, claimants' Standard of Review poses the question: Was the insurance company's actions/decisions arbitrary and capricious?

This standard is one of the hardest to prove under our system.  And remember, you are the plaintiff and the burden of proof is on you.  You most often are limited to proving the insurance carrier's actions were arbitrary and capricious solely through the use of their claim file.  That means that you rarely get the opportunity to call a witness or present evidence.

So Insurance Companies Have An Edge At The Outset . . .

One could argue that they do.  And despite the many big budget insurance commercials and marketing campaigns assuring you that they do the responsible thing and that you're in pretty good hands, few insurers, if any, actually live up to these claims.  Rather, for many, denying claims is business as usual - whether those claims are legitimate or not.  Instead of evaluating whether or not the claimant is entitled to benefits, many carriers evaluate whether or not they can avoid paying the claim (a familiar situation exists with health insurance).

Take Unum For Example . . .

Most people are aware that Unum Provident was exposed on 60 Minutes for denying coverage to their disabled customers.  It was so wide-spread that Unum was investigated by 49 state attorney generals, and the U.S. Department of Labor.  Unum quickly settled before the regulators could dig too deeply.  As a result, the regulators never dealt with some of the worst complaints against Unum.

This deny mentality appears to be endemic in the insurance field.  Of course, there are exceptions and there are insurance carriers out there who strive to keep their word.  However, too many do just the opposite.  When it comes to disability policies: Caveat Emptor (let the buyer beware).

Don't Go It Alone . . .

If you have a disability claim, it is prudent to seek the advice of an attorney experienced in disability law to obtain the benefits you paid for and have a legal right to receive.  Again, when dealing with disability insurance, the burden of proof is squarely with you.  Having an experienced attorney on your side can make all the difference.