When the CEO of a well-established financial management firm in New York turned to Newfield Law Group, he was already under considerable stress. What he had expected to be a straightforward claim under his private long-term disability insurance policy from Principal Financial Group instead turned into a frustrating experience. We were retained and secured the benefits he was rightfully due.
Despite paying substantial premiums over the years for a high-value private policy (sometimes called an individual policy), he found himself facing an unexpected aggressive denial of benefits. Principal, which is one of the well-known providers of long term disability insurance in the U.S., had approved only a narrow window of benefits and refused to acknowledge the full extent of his disability.
This is not an uncommon tactic, especially in cases involving high income earners where monthly benefits are valued in the five figure range. But for our client, who had spent years managing chronic pain while still running his financial services firm, the denial felt both personal and unfair.
A Long-Term, Degenerative Condition Ignored by the Insurance Company
Our client, a 59 year old hardworking owner of a financial services firm, suffered from advanced osteoarthritis in his knee for several years. He had done everything possible to try to delay or avoid surgery, including physical therapy, cortisone injections, anti-inflammatory medications and more.
His determination to continuing to work were commendable, but this same effort to work through the pain was used against him by Principal.
Osteoarthritis is a progressive degenerative joint disease marked by the gradual breakdown of cartilage, the protective tissue cushioning the ends of bones. Over time, the condition leads to bone-on-bone contact, causing inflammation, swelling and severe chronic pain. Eventually the damage becomes so severe that mobility and function are impaired.
The CEO had reached the end of his attempts to delay surgery. Even with a fierce will to keep working, the effect of his osteoarthritis had begun to interfere with his ability to think clearly, sleep and focus. These are critical abilities for a CEO responsible for making high-stakes decisions affecting assets under management. By January 2024, his treating orthopedic specialist at one of the nation’s leading orthopedic hospitals recommended a knee replacement. Surgery was scheduled for May 2024, with the understanding that he would not be able to continue to keep working in the months leading up to the procedure.
The Denial by Principal Financial Group
The CEO filed a claim for long-term disability benefits soon after making the decision to step down from his role. Given his condition and the history of medical treatment, he expected the claim to be processed and approved without any unnecessary delay.
Instead, Principal approved only a limited timeframe of benefits – from September 17, 2024, to January 17, 2025—stating that his disability began and ended in that time and entitled him to only a partial payment after the elimination period.
This wrongful handling of his claim completely disregarded the documented progression of his illness, the credible medical evidence, and the fact that he’d stopped working because of legitimate functional limitations long before the surgery date. The claims manager at Principal made the unbelievable assertion that until he had undergone surgery, he was not truly disabled. This was both medically and legally wrong.
Worse, Principal attempted to argue he was “unemployed” at the time of the claim filing, rather than accept that he was disabled from his occupation as a CEO. This mischaracterization of his employment status was not only unfounded but potentially cause for legal action under contract law.
How Newfield Law Group Fought Back and Won
Disability attorney Jason Newfield immediately recognized the unfairness in Principal’s position and began compiling a detailed, well-supported claim file including:
- An extensive medical history of his osteoarthritis, including imaging studies and clinical notes.
- Records of the conservative treatment spanning many years
- Letters and opinions from treating physicians documenting functional impairments and clinical diagnosis.
- A vocational analysis outlining the cognitive and physical demands of a CEO and how his condition made him unable to meet the demands of his occupation.
Newfield Law Group also addressed the legal framework that applies to private disability policies. These policies are governed by contract law, rather than ERISA (the Employee Retirement Income Security Act). In non-ERISA policies, long term disability insurance companies are held to a higher standard to act in good faith and fair dealing with policyholders. Taking an adversarial posture, making outright misrepresentations about employment status, or denying benefits without adequate representations is not allowed by law and could have subjected the company to a lawsuit, even if the claim is not under ERISA.
Our fight was to get our client the long term disability insurance benefits he was due as per the terms of his private long term disability insurance policy with Principal prior to the date of his surgery. We presented Principal with a detailed rebuttal, highlighting the strength of the medical evidence and the insurance company’s failure to follow its own obligations under law. We demanded a specific claims representative, whose handling of this claim we believed to be careless, biased, and adversarial, to be removed from his case.
Medical Realty vs. LTD Insurance Company Tactics
A key point in this case involved Principal’s failure to recognize the implications of osteoarthritis. While this condition may be common, it does not make it any less disabling for those suffering from severe cases. By the time a claimant gets to needing knee replacement, the joint is so badly damaged that therapies and medications do not and cannot relieve the pain.
Principal’s suggestion that the cognitive impairment suffered by our client was irrelevant because his primary diagnosis was orthopedic in nature reflects either an inability to understand this disability or a deliberate attempt to deny a claim. Chronic pain doesn’t exist in a vacuum; it impacts sleep, mental clarity, mood, and the ability to concentrate. These are all vital components of executive functioning. For a high-performing CEO where success is measured in dollars, even a moderate decline in these areas can make it impossible to maintain performance.
We used peer-reviewed medical journal articles and clinical studies to establish the widespread impact of chronic osteoarthritis on cognitive and psychological functioning. Our client’s condition wasn’t just a bum knee – it was an inability to lead his firm because of the cascading consequences of a progressive and degenerative disease.
A Hard-Fought Final Success
Though persistence, legal and medical advocacy, and powerful collaboration with our client, Newfield Law Group was successful in securing the full disability benefits to which our client was entitled. Principal revised its positions and paid the benefits due under the private policy, covering the entire period of disability and not just the months leading up to surgery and returned premiums for the relevant time frames.
Our client is now able to focus on his recovery and rehabilitation, without the added stress of financial uncertainly or embarking on a legal battle. He has the peace of mind the LTD policy was intended to bring, thanks to the strong representation by Newfield Law Group.