Don't be blamed for disability denials
By Frank N. Darras
As a disability insurance agent, you are in the trenches day in and day out selling disability coverage to your clients. They understand the need for the coverage and have trusted you to find the right policy and carrier for them. What happens then if their claim is wrongfully denied? What do you do if they come to you looking for answers?
First and foremost, let's look at the application process.
A major reason for claim denials has to do with misstatements and/or omissions which have been made on the application by the claimant. Many times, misstatements have been unintentional due to the inadequate wording of a question. Experts agree that disability claims start with the application. Some critical areas of the application which affect a claim and could be answered incorrectly, or dishonestly, have to do with:
- Other pertinent facts such as hobbies, etc.
What about those claims which have been inappropriately denied? For instance, a claim denied because of contract language? An example of this:
- A policyholder submitted a claim, unaware the policy had lapsed due to a change of address. The claims department initially denied the claim due to the policy not being in force. What happened? The contract clearly stated that all policy changes must be submitted in writing. The claimant's agent verbally made the change and the submitted change was incorrect.
Don't overstate the occupation definitions. It is your duty to help your client understand that the words "own-occupation" should not be taken for granted. Just because these words are physically on a proposal does not mean that they are reviewing the best definition of total disability available. Make sure that you are educating your client about the definitions and how they are affected by them. The last thing you want your client to think is that they are covered under own-occupation until age 65 when, in reality, the policy has multiple definitions and periods of payments. For example:
- A policy where the own-occupation total disability is paid for a period of time and at the end of that time the policy definition changes to a regular occupation or any occupation definition
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