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BROKER
WORLD
"Disability
Claims: Armageddon II"
 There
was Armageddon the movie. Now there is the Armageddon
that goes beyond Hollywood and brings to real life the
current state of disability claims.
Whether
your client is submitting a new claim, having a problem
with an existing one, or has been terminated by the insurance
company, help is needed. Enter the disability claim consultant,
giving advice or breathing life into the claim, hopefully
to enable a claimant to be paid fairly. In turn, enabling
the insurance company to honor the claim as promised in
their disability contract.
Today,
insurance carriers use video surveillance, independent
medical evaluations, outside investigators, CPA consultants,
and a host of other support to try to prove the claim
is not worthy of being paid. And sometimes they are right!
However, I'm seeing many claims that should be paid that
aren't!
The
current claim environment appears to be related to economic
issues in which the policyholder/claimant as well as the
broker/agent has little or no control. Decisions are made
by many insurance companies from the top that relate to
quarterly statements and stock market performance. In
other words, short term decisions that have long term
implications.
The
purpose of this article is to let you see a disability
claim from the perspective of one who has experienced
such on a personal basis. In addition you will get a glimpse
of the type of advice a disability claim consultant can
provide. (Note that any name I use is fictional for privacy
purposes.)
Ed was a practicing
dentist in a major metropolitan area who went on total
disability at age 54. His diagnosis was major depression
and
pharmaceutical abuse (overuse of valium and xanax). One
week of rehab did not work for Ed, so he was sent to a
rehab facility in another state for six months, away from
his family and friends.
This
treatment was a success in keeping Ed drug free, and he
continues as such to this day. He goes to substance abuse
meetings (alcohol/drugs) weekly and continues to see a
psychiatrist and psychologist on at least a monthly basis,
since he still battles the demons of depression. Might
I add that after being drug free for six months, Ed went
back to work part time for 20 hours per week, but found
that he was not able to function well in a clinical dentistry
practice. He was, in fact, a danger to himself as well
as his patients.
After
six months of working part time and collecting under a
"residual" (partial) disability definition, he stopped
working again and went back on total disability. Shortly
thereafter he was able to secure a part time position
teaching second and third year dental students at a local
dental school four days a week.
He
is not involved with any of the complicated surgeries
or other procedures he performed in the past, but he oversees
the work of his students in addition to his teaching responsibilities.
Ed's
attending physicians have maintained all along that he
cannot go back to practicing clinical dentistry; and,
based upon my conversations with this claimant, it is
clear that if he goes back to work in a dental office,
he will again abuse drugs since the desire continues.
He has attempted suicide in the past, and the potential
is there again if pushed in the wrong direction.
Ed expected to receive
a check for the rest of his life, according to the terms
of his disability policy, which says he is totally disabled
if he "cannot perform the important duties of his
regular occupation." For four years the insurance company
paid his monthly benefit after being convinced of his
illness by their own independent medical evaluation early
in his disability.
The company requested
another independent medical examination to "update"
the previous one. The examiner formulated an opinion that
the insured "by choice" (new flavor of the month
terminology) didn't want to go back to work in clinical
dentistry. As a result the claim was terminated in conflict
with all prior medical documentation. Think of which end
of the depression scale Ed was on when he received the
termination letter.
So what's this all about? This is a strategy
on the part of the insurance company to see if the claimant
will: (1) Accept the
company's conclusion without question.
(2) Complain to the insurance company indicating
that the termination is not justified.
(3) Hire an attorney.
Based
upon the response by the claimant, the insurance company
will determine its course of action. Many times a situation
like this becomes a game to see who can move the most
paper and to see if the claimant and/ or his attorney
can be "worn down."
In Ed's case I was
hired by him directly in a consulting capacity.
After a careful review of various documents, shaping up
the claim with additional clarification and bringing in
our own independent medical examiner, the insurance company
paid back-payments of some ten months and is now continuing
the monthly benefit. The claim is now being paid under
a "reservation of rights" (a scare tactic in and
of itself), and the company is implying that he is disabled,
but on a partial basis only. The company has also indicated
that it is still reviewing further documentation to determine
in which direction to proceed.
In the meantime
my client becomes further depressed by these actions and
may have to prove even further what has previously been
proven that his claim is valid. A humiliating and time
consuming experience for one who may not be up to par
to begin with.
Many
insurance companies are bombarding claimants with tremendous
paperwork and confusion, the likes of which you and I
have never seen. Some are insulating themselves with quantities
of bodies to keep you and your clients further confused.
As an example, one of the major players has its claim
department broken down into various sub-classifications.
Their "psych unit" hierarchy starts off with an assistant
claim representative and goes upward as follows: associate
claim representative, claim representative, senior claim
representative, chief claim representative, consultant,
director (or unit manager) and finally vice president
(who is in charge of the "psych unit") who
in
turn reports to the senior vice president in charge of
all disability claims. Count them; eight people
before you get to the top guy. Some companies call the
top guy the "director of claims," but in the aforementioned
company you would only be getting the third guy from the
top. Getting confused? You betcha, and that's the purpose
of it all.. .to insulate the top guys from the pack and
keep claimants running around in diminishing circles.
In addition, there
may be one or more others involved in a claim; such as
caseworkers, registered nurses, rehabilitation counselors,
CPAs, medical directors, medical consultants, ergonomics
consultants, ad infinitum. Where does it end? It seems
like it doesn't! In the case of Ed, the insurance company
stood to save $2 million by terminating his claim. Now
you see why current claim management practices take on
a new meaning.
Going
it alone in today's disability claim environment can prove
to be economically devastating. A disability claim consultant
can help in submitting a new claim in a clear, logical
fashion so that the claimant does not prejudice his rights.
Unfortunately there is a shortage of talent in this area,
but those who have a proven track record of disability
sales or have worked for an insurance company in a seasoned
capacity can most likely provide this valuable service.
There is definitely a learning process, and most of this
will come from personal experience.
What
Does a Disability Claim
Consultant Do?
Once
hired, the job involves (but is not limited to) the following.
1.
Reviewing all policies, including copies of the original
application for coverage as well as any changes or increases
that may have occurred over the years.
2.
Reviewing diagnosis/prognosis reports from physicians
that provide insight into the medical history which has
created the claim.
3.
Helping answer the questions on the claim forms
or any related questionnaire.
4.
Providing advice on how to communicate with the attending
physician(s).
5.
Determining if it is a total or a partial (residual) claim.
6.
Determining if the claim relates to "your occupation,"
earnings (or both), or some other definition.
7.
Advising how to handle visits by claim investigators,
CPAs as well as visits to independent medical examiners.
8.
Advising how to prepare a list of pre and post disability
duties, broken down hourly and weekly.
9.
Helping to determine what the claimant can and cannot
do with respect to post disability duties when there is
more than one policy. Playing golf or tennis may not be
a problem for one claimant, but may be a problem for another.
10.
Providing advice on the meaning of exclusions, offset
provisions; earning clauses, if applicable; and a host
of other contractual wording.
A
disability consultant should also be able to help develop
a strategy in connection with the claim. There may be
a need to bring in another consultant such as a CPA, another
physician, or another professional to help. Often the
disability claim consultant will be able to provide advice
to attorneys when the services of such an individual is
appropriate to the claim.
A
consultant should always be caring and credible. Any claim
that smells of fraud should be dismissed immediately.
Preparation
and more preparation is what has given you the confidence
to achieve success in selling disability insurance. Guidance
from a disability claim consultant can be a valuable third
party influence, and you will be relieved of the burden
of getting involved in a claim for which you will lose
renewal commission.
When expertise is needed, look for those who can be there
when you can't -the disability
claim consultant.
_____________________________________________________________
Arthur
L. Fries, RHU,
is an independent life/health broker and a disability
claim consultant based in Newport Beach, CA. He can be
contacted at (800) 567-1911
or via www.afries.com.
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