People buy disability insurance to protect themselves financially in the event they cannot work. Generally, there are two types of disability insurance coverage: (1) own occupation; and (2) any occupation.
Own vs. Any Occupation
An own occupation policy provides benefits where you cannot perform the material and substantial duties of your job. An any occupation policy provides benefits where you cannot perform the duties for any job for which you are reasonably suited based upon your education and training.
Some policies may have a combination of both own occupation and any occupation coverage. For example, the policy may provide benefits for your own occupation for 24 months and thereafter coverage is provided only if you are disabled from any occupation.
Types of Insurance Policies
It is important that you have a copy of your insurance policy and you review the policy to note the coverage you have. There are two types of insurance policies: (1) individual insurance; and (2) group insurance.
Individual insurance is insurance you buy on your own. The insurance policy is given to you directly. Group insurance is insurance you generally buy through your employer or insurance that is paid for by your employer as part of your employee benefits. It is import to know whether you have a group insurance policy because it can dramatically impact your rights.
If you have an individual insurance policy or you have a certain type of group disability insurance policy, you have certain rights when dealing with your insurance company:
- Your insurance company must promptly pay your claim - generally within 30 days from receipt of your claim.
- Your insurance company cannot deny or refuse to pay your claim unless it first investigates and evaluates your claim.
- When investigating and evaluating your claim, your insurance company must look for reasons pay the claim.
- Your insurance company cannot deny or refuse to pay your claim unless it has a good reason for not paying the claim.
- If it denies your claim, your insurance company must give you the factual and legal basis for denying the claim.
Employee Retirement Income Securities Act
If you have a group disability insurance policy purchased through or provided to you by your employer and you are not employed by a state or local government, you still have the right to expect your insurance company to treat you fairly and in good faith. However, it is likely your remedies will be governed by a federal law called the Employee Retirement Income Securities Act ("ERISA").
Although enacted with the idea of protecting employees, the courts have interpreted ERISA in a way that severely restricts an individual’s right to seek redress in a court of law. If you have group disability insurance policy governed by ERISA, the claims appeal process is critical if your insurance claim is denied. You should consult with an attorney immediately.
DO NOT WAIT UNTIL YOUR FINAL CLAIMS DENIAL BEFORE SPEAKING WITH AN ATTORNEY.
As a general rule, the only information a court will consider is the information given to the insurance company during the appeal process. Therefore, if your appeal is not perfected, it is unlikely that a lawsuit to get the claim paid will be successful.
Our goal is to help you understand your rights when dealing with an insurance company. If you think your health insurance company is treating you unfairly, contact us or call (888) 640-0835.
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