How To Avoid Disability Insurance Claim Problems

One of the few memories I have of my father from my childhood was when he lost his toe-nail.  Apparently, he dropped a steel plate on his foot at work and then he reflexively kicked it.  Obviously, that was not the thing to do.  He broke his toe and later the toe nail fell off.  That was right before he started paying a little extra for steel toed shoes to wear to work.

Last month someone came to this blog who had done a Google search because of a disability insurance claim problem.  I don’t know any of the details about his claim.  In January the focus at The Insurance Barn was on Medicare Supplemental insurance plans.  In February the spotlight was on Long Term Care Plans.  Both of those types of plans are most popular with people who have already committed to retirement.  In March this blog will present several types of personal insurance.  Some of them, like life insurance, are more popular than others.  All of them are useful on their own but none of them will insure against every risk you will encounter in life.


Working with your advising team you will need to make choices.  When you are working with the planning team, each professional will make suggestions that are in their best interests.  There is nothing wrong with that, provided you remember that you should be the one making the final decision.  All those professionals work for you and not the other way around.  Listen to what they have to say.  Just because their ideas are in their best interests does not make them bad ideas.  If your best interests are the same as theirs, “go for it.”


With that preamble, I want to shift gears a bit and answer the concerns of the individual who came across this blog while looking for answers to his disability claim.  I wish I could say that problems with disability claims never occur.  Unfortunately, that would be a lie.  I would get a “time out” if mom ever read this post.  The truth is that disability insurance is one of the most abused of all personal insurance.

For life insurance you can  definitely tell if someone is dead.  Medigap insurance is difficult to defraud.   Before they pay anything, Medicare must approve the claim.  They just follow Medicare’s lead.  If Medicare pays towards a claim, Medigap will.  If Medicare does not pay for treatment here in the U.S., Medigap will not.  Medical treatment obtained over seas may or may not be covered with Medigap.

Long Term Care insurance is a little more open to claims fraud.  Still, most insurance companies assign a case worker and have annual reviews to limit the amount of fraud that takes place.  Disability insurance is a tad easier for less than upright people to commit insurance fraud.  Without regular reviews it is easier for a person to take advantage of their disability insurance then most other types of personal insurance.  As a result, insurance companies are typically more wary of disability insurance claims.


Commercials and insurance agents tell people insurance is “peace of mind.”  “Peace of mind” is a benefit of insurance but that benefit comes only because, at its heart, insurance is a contract.  As with most contracts there are privileges and responsibilities for everyone involved.  As the insured you have the priveledge of receiving cash payments if you get injured or become ill and are unable to work.

You also have the responsibility to prove that your injury or illness is the reason you are unable to earn a living.  Many people claim the privileges of disability insurance but conveniently forget they have responsibilities at the same time.  The most common cause of disability claim delays or denials is not with the insurance company.  It is with the insured not giving them the proof required.

Before any disability insurance plan will start paying a claim they require proof that your injury or illness is severe enough to prevent you from earning an income.  I’ll discuss the differences between Any Occupation and Own Occupation in May when disability insurance is scheduled to be in the spot light.

President Ronald Reagan is commonly credited with making popular the Russian proverb, “Trust but verify” in the 1980s.  Insurance companies will never tell you that you do not hurt.   They will, however, require a statement from your doctor that your injury or illness disables you to the point where you are unable to work.

The definition of disability is not purely on how you feel.  You may very well feel rotten but unless you are able to get a licensed physician to certify that you are unable to work, you will not receive any disability insurance money.

Of course there are other reasons why a claim is delayed or denied but in my practice, most of the time, the adverse actions were caused by the insured not being able to get a doctor to verify their injury/illness prevented them from working.


There are two things you need to do.   The first thing you can do today, before anything bad happens.  Hopefully, nothing will but the “fickle finger of fate” seldom announces bad news.  Before that happens, read your disability policy.  Make certain you know that the benefits are sufficient for you and that you understand what is required.


Secondly, if you are involved in an accident or become ill, remember your doctor is going to have to certify that you are medically unable to work.  If your doctor will not certify that you are disabled, your disability claim will most likely be denied.  Try not to get too frustrated.

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