It is always a good idea to buy disability insurance coverage. While workers’ compensation can cover you when you cannot work in some instances, these benefits only apply after a work-related injury. If you experience another health issue that causes a disability and prevents you from working, you need another source to provide financial support as long as you cannot work.
Once you have coverage, you may develop a temporary or permanent disability. You also may not know how severe your condition is when you apply for benefits. All you know is that you cannot earn a living and expect to struggle to pay your bills. You do not know where to start when seeking benefits under your disability coverage.
Whether you are considering purchasing a private disability policy or need to file a claim for benefits, never hesitate to seek professional guidance. A disability claims attorney can assist you with the entire claims process, including filing new claims, appealing denials, or seeking an extension of benefits.
Seek legal assistance with a private disability insurance claim lawyer as soon as possible. Doing so can only help your financial future.
Does Private Disability Insurance Pay Part of Your Salary When You Cannot Work?
Disability insurance will replace part or all of your income when you cannot work. Policies typically pay between 40 to 100 percent of your income while you are out of work. The more income the policy pays you, the higher the premiums.
Your policy will contain a definition of the term disability. Each policy may define the term differently.
Typically, disability insurance policies may have different definitions of the term based on how long the disability lasts.
- Many disability insurance policies will pay benefits if you cannot work at your specific job for the first two years.
- These policies may change definitions after two years, only paying you benefits if you cannot do any type of gainful work at all. Insurance companies may expect you to retrain and change careers due to your disability. They often use this as an excuse to take away your benefits entirely when you still need them.
The insurance company will also carve out several conditions from coverage. For example, they may not cover pre-existing conditions. In addition, the insurance company may limit coverage of mental health conditions.
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How You Can Get Disability Insurance Coverage?
There are two ways that you can obtain disability insurance:
- Many employers provide disability insurance as an employee benefit. You may have both short and long-term disability insurance. Your employer will select the carrier and provide coverage as part of your overall compensation package. Many companies pay for disability insurance because they want to be competitive in the market for talent.
- If your employer does not provide disability insurance or you are unsatisfied with what they offer, you can purchase your own insurance. This is called private disability insurance. You are still dealing with an insurance company, but you are the one who is choosing them and paying the premiums out of your pocket.
Private disability insurance stays with you if you change jobs. If you have employer-provided insurance, it may not cover you if you had a condition when the coverage started. If you have private insurance, the policy begins on the date of coverage, as opposed to when you took the new job.
What Should I Look for in a Private Disability Insurance Policy?
You can compare insurance companies before you select a private insurance carrier. You trust this company to care for you when you cannot provide for your family. The last thing you want is to receive a claim denial when you expect benefits and critically need them.
Here are some things that you need to review when you purchase private disability insurance:
- The extent of the conditions that have coverage under the terms of the policies and any exclusions from coverage
- The percentage of your income that you will receive as benefits if you have a disability
- Any cap to benefits
- The cost of the premiums
- Whether you can customize the policy (paying more for additional coverage or different exclusions)
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Is Working With a Private Disability Insurance Company Difficult?
Unfortunately, what will usually not differ between employer-sponsored and private policies is that insurance companies do not like to cover disability insurance claims. Any money they pay you means money out of their pocket, and their attitude is usually “it’s either us or you” – and they will choose the “us” every time.
Disability insurance companies will make it as difficult as possible for you to get benefits. They often deny a claim and force you to fight them in court. They usually try to find any excuse possible to get them out of paying. You may be expecting your benefits and are shocked to get the letter telling you why they denied your claim.
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Can I Sue the Insurance Company or Appeal a Denial?
Private insurance does not mean that public laws do not apply. However, a different set of laws applies based on whether your insurance is through your job or you have paid for it yourself.
The good news for you is that you do not have to deal with the federal law called ERISA. When your disability insurance coverage is through your job, ERISA provides procedures to follow when you want to file a claim or appeal a benefits denial. ERISA is an insurance company-friendly law that can make appeals more difficult.
When you appeal a denial under a privately-purchased disability plan, you have the option to sue the insurance company in state court to demand benefits. Access to state court means you do not always have to go through the insurance company’s administrative appeals process before filing a lawsuit (although you should consider filing an internal appeal with advice from your attorney). In state court, you can sue the insurance company under the common law theory of breach of contract.
How Can I Sue an Insurance Company for Denying a Private Disability Claim?
Your private disability insurance policy is a contract between you and the insurance company. You have paid premiums in exchange for coverage when you qualify for it under the plan’s terms. If the insurance company denies your benefits when you meet the plan’s definition of “disability,” they have breached the contract and can face legal action.
You will also have several other legal options to pursue against the insurance company in your lawsuit. Other legal theories can apply to your lawsuit. For example, you can also claim that the insurance company was negligent in selling the policy or evaluating your claim. You can sue them for misrepresentation or fraud.
What are Bad Faith Claims for Unreasonable Denial of Disability Claims?
Perhaps the most potent weapon you can use against an insurance company in state court is a bad faith claim. You do not have this tool in your kit in an ERISA case. When an insurance company wrongfully denies your claim, they may not just be liable to pay the benefits they owe you.
Insurance companies use many tactics in evaluating claims that can open themselves up to liability, including:
- Unreasonably denying a claim that has obvious merit
- Unreasonably delaying the processing of your claim
- The failure to perform an adequate investigation before denying your claims
- The use of threats and pressure in the claims process
- Making apparent misstatements and misrepresentations in describing the policy benefits or the claims process
Bad faith is a claim against the insurance company itself. They will be obligated to pay you damages for their conduct. You can get compensatory damages, and the insurance company can also be obligated to pay you punitive damages. However, not every wrongful claim denial rises to the level of bad faith.
The insurance company may have a different opinion that the court overrules, but their conduct may not have met the high bar required to prove bad faith. Nonetheless, insurance companies fear bad faith lawsuits, and for good reason.
How Can I Compile the Strongest Possible Lawsuit?
You must prepare the strongest case to persuade a court when appealing a denial.
You need a lawyer to compile:
- Medical records that detail your condition
- A statement from your treating doctor about your condition and symptoms
- Statements from vocational experts about why your condition will prevent you from performing the duties of your job (or working at all)
- A personal narrative from you that details what you are going through daily
- Statements from people who know you about what they see you dealing with
Since your case is not through ERISA, you can obtain more evidence from the insurance company in discovery while your case is pending in state court. Your lawyer will aggressively work to get this proof.
Should I Hire an Experienced Disability Lawyer to Fight the Insurance Company?
You cannot take on an insurance company on your own. They have an army of lawyers, and they are committed to making your life as hard as possible. When you protest the denial of your benefits, they will dig in and not budge. They know that you will need something else to force them to pay. That something else is an aggressive and experienced lawyer who can take the insurance company to court.
An attorney is ready for a battle when you receive a denial of benefits. You will likely have to file a lawsuit, and the legal process can take years. In your favor, you will receive benefits backdated to when you filed your claim if you win your case.
How Can I Get Private Disability Benefits After Filing a Lawsuit?
There are generally two ways that you can still get benefits after an initial claim denial:
- You can settle your case after you file a lawsuit. The insurance company might realize it has some risk and offer you part of the money they expect to owe you if you win the case. This is often an outcome in a disputed case. The insurance company may not want a “bad” legal precedent if it loses its cases.
- You will win your case in court. Disability insurance cases often go through multiple rounds of litigation, all the way to an appeals court.
Either way, you need an attorney to win your case. The insurance company will come ready to fight in court, and you need to take the fight to them. They have hired their defense attorneys to fight for them. You need a strong advocate in your corner and should consult with a disability lawyer immediately.
How Can a Private Disability Insurance Attorney Help Your Case?
A private disability insurance attorney can:
- Prepare your claim to make the most persuasive initial case to the insurance company that you deserve benefits.
- Review the insurance company’s reason for denying your case and get the necessary documentation to show that the insurance company is incorrect.
- Choose the best potential forum in which to file your lawsuit.
- Communicate with the insurance company to work out a possible resolution to your dispute.
- Draft the lawsuit complaint that begins your lawsuit.
- Represent you throughout the discovery process, obtaining evidence that can help you prove your case.
- Try your case in court if you have not resolved it.
Insurance Companies Know You Mean Business When You Have a Lawyer
Private Disability Claims Lawyer, J. Price McNamara
You need a lawyer with a track record of successfully taking on the big insurance companies. If you hire an experienced private disability claims attorney, the insurance company has likely heard of them and their reputation.
The insurance company may know it is in for a battle and take a different route when they see you hired a hard-hitting attorney. Attorneys earn reputations with the insurance company based on their record of results. Insurance companies keep scores based on who they deal with over time.
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