We are hearing from numerous high level executives with companies whose long term insurance disability policies, through no fault of their own, have recently changed from first class to steerage.
The reason? Their employer changed disability insurance policy providers and the policy owners have become legacy policies.
Multi-national companies who buy long term disability insurance policies are great customers for LTD companies. They are courted by sales people intent on closing deals on big contracts, earning the company and the sales people significant profits. The large regular premiums mean the LTD company has to keep their clients happy, taking care not to aggravate too many claimants. They still deny and delay, but there’s a certain courtesy extended when you are part of a billion dollar coverage plan.
But when the love affair is over and the large company moves its LTD policies to another carrier, the people who have the policies from the prior carrier face increasing challenges.
The LTD companies have the potential exposure and costs of the old policies, but the premiums are not coming in. From what we’re seeing, this decision starts at the top and moves down to the claims process.
High level executives who are on claim are now more likely to have their benefits reviewed more intensely, as the managers seek a reason to deny claims. We believe this also extends to outside, third party claims offices, including the doctors and nurses who perform medical examinations and reviews.
Many of the calls coming in are from executives with UNUM and UNUM Provident. They were on claim, receiving monthly benefits, when out of the blue, their claims were terminated, or they began receiving requests for additional information or reviews of new medical records. Hartford claims are also common, with formerly Aetna policies in the crosshairs. Same with Lincoln Financial claims, on prior Liberty Mutual claims, as these are all “legacy” coverage from prior carriers.
We have gone up against all of these companies and know the ferocity with which claims are being handled for people whose employer no longer has a contract with this company is extreme, even for LTD companies. If your policy is from a company that your employer no longer uses for LTD insurance, your claim should be considered vulnerable.
If your claim gets terminated, you need to know how to defend yourself.
- The insurer is required to provide you with a written explanation for the reason for the denial. If your company no longer does business with the insurer, be mindful they are going to be aggressive.
- ERISA requires you to file an appeal but remember the appeal is being reviewed by the same company that denied your claim and ERISA is a complicated law. If your claim is valued at $500,000 over the life of the claim, you need to consider retaining an experienced, knowledgeable LTD attorney. There is simply too much at stake to try to do this on your own.
- If your ERISA appeal is denied, your only recourse is to go to federal court. Here again, you need an experienced ERISA attorney to represent you. Insurers have demonstrated an increasing willingness to go to court with denied appeals, so don’t be surprised when your D-I-Y ERISA appeal is denied.
Anyone whose LTD claim has been denied or terminated needs to consider how much is at stake. We routinely find people calling the office do not realize just how much the value of their claim holds. Often, the duration is extensive and the benefits significant.
If you own several policies, which most high-income earners do, and your payment is in the $10,000 to $15,000 range, your losses could easily reach $120,000 a year. Is it worth it to retain an attorney to defend your claim? We believe it is worth at least exploring.
