Disability Insurers’ Tactics Are Often A Double-Edged Sword

The insurance industry doesn’t have the best reputation when it comes to handling disability claims and there is no question as to why.  Insurance companies are known for denying disability benefits and scrutinizing claimants, among other things. 

According to the article in the March 2010 issue of SmartMoney magazine, “Too Sick to Work? They Disagree,” in 2004 and 2005, Unum Group agreed to pay $24 million in fines to regulators because of its handling of disability claims.  Since then, the insurer has emphasized a training program for case managers regarding how to encourage employees to get back to work, without appearing too aggressive.  While this approach sounds fine, patient advocates have called such tactics used in the insurance industry as a “double-edged sword.”

Supposedly, there are some insurance companies that have hired people to assist seriously disabled workers in applying for Social Security disability benefits.  That may seem innocent enough, but the insurers have a significant interest in the worker obtaining government benefits. Insurers don’t have to pay for whatever portion is covered by the government.

Not surprisingly, insurance companies might initially act friendly, but the helpfulness typically doesn’t last.  Reportedly, there have been cases where insurance companies have stopped paying as soon as the individual qualified for government assistance, which could mean a 50 percent cut in benefits.  It’s amazing how quickly the insurer’s goodwill can come to an end.

For more information regarding Virginia long-term disability claims and why they are often denied, order a copy of my book, Robbery Without A Gun.