Why Do Long Term Disability Insurance Claims Get Denied?

Long term disability insurance denial can happen for valid or bad faith reasons, depending on the case. Valid reasons can be based upon the nature of the disability and the claim process, and whether you are fit to receive disability insurance benefits. Bad faith denials, on the other hand, occur when the insurance company fails to pay a valid claim. If your long term disability insurance is denied, it may be helpful to know the issues associated with having a long term healthcare policy, the most common reasons long term disability is denied, mistakes to avoid when filing a long term disability claim, and the steps you may take if a long term disability claim is denied.

What Is Long Term Disability Insurance in Illinois?

Long-term disability insurance in Illinois is a type of insurance that provides financial protection to individuals who are unable to work due to a long-term illness or injury. This insurance policy is designed to replace a portion of the claimant’s income when he or she is unable to work for an extended period, typically beyond the short-term disability coverage period, which usually lasts for a few months.

Here are some key points to understand about long-term disability insurance in Illinois:

  • Coverage Period: Long-term disability insurance generally provides benefits for an extended period, such as years or until the policyholder reaches a certain age, depending on the terms of the policy.
  • Eligibility: To be eligible for long-term disability benefits, you need to have an active policy in place before the disabling condition occurs. This means you should purchase the insurance before you become disabled. 
  • Premiums: You will need to pay regular premiums to maintain your long-term disability insurance policy. Premiums can vary based on factors like your age, health, occupation, and the coverage amount you choose. Frequently, these premiums are paid along with other health insurance policies through your employer.
  • Benefit Amount: Long-term disability insurance typically provides a monthly benefit that replaces a percentage of your income (usually around 50% to 70%). The specific amount and duration of benefits will depend on your policy.
  • Waiting Period: There is usually a waiting period, known as the elimination period, before your benefits start. Common elimination periods are 90 days, 180 days, or even longer. During this time, you may rely on short-term disability, sick leave, or savings.
  • Group vs. Individual Policies: Long-term disability insurance can be obtained through your employer as a group policy or purchased individually. Group policies may offer more affordable premiums, but individual policies allow for more customization and often have better portability.

To qualify for long-term disability benefits, you will need to provide medical evidence that supports your inability to work due to a covered disability. Insurance companies often require regular updates from your healthcare provider. Some policies may have exclusions or limitations related to pre-existing conditions, meaning that they may not cover disabilities caused by a condition you had before obtaining the insurance.

It’s important to carefully review the terms and conditions of any long-term disability insurance policy you consider purchasing. It’s also a good idea to understand the state regulations that may apply to insurance policies in Illinois. 

Most Common Reasons Long-Term Disability Is Denied

Long term disability insurance denials can happen when medical evidence that is provided to support the existence of a policyholder’s disability looks inadequate to the insurance company reviewing the claim. Insurance companies may also deny claims through bad faith intentions against the policyholder.

The most common reasons long term disability insurance is denied by insurance companies include:

  • Insufficient or Inconsistent Medical Evidence. Your medical evidence cannot be inconsistent or conflict with other pieces of evidence you have provided. This could suggest fraud or an exaggeration on your part to the insurance company, resulting in your claim being denied.
  • Your Condition is not a “disability.” Review your long-term disability policy to see if your medical condition is considered a disability by your insurance company.
  • There are errors in your claim, or you missed an important deadline. Clerical errors or missing the filing deadlines can be a reason for the insurance company denying your entire claim. Most insurance companies will try to find any reason not to review your claim and provide coverage, and simple errors or missed deadlines are an easy way to deny a claim.
  • Inadequate Medical Treatment: If you haven’t pursued appropriate medical treatment for your condition or haven’t followed your doctor’s recommended treatment plan, the insurance company may question the validity of your claim.
  • Occupational Duties: Your ability to perform your own occupation or any occupation can be a critical factor in determining disability. If your policy defines disability as an inability to work in “your occupation” but you can work in another job, your claim may be denied.
  • Surveillance or Investigation: Insurance companies sometimes conduct surveillance or investigations to check the legitimacy of a claim. If they find evidence suggesting you can work or are not as disabled as claimed, your claim may be denied.

Mistakes to Avoid When Filing a Long-Term Disability Claim

When filing your claim for long term disability, your insurance company can find common mistakes and use those mistakes, sometimes trivial ones, to deny you coverage. When you file a long-term disability claim, you need to be as specific as possible about your disability. This means providing detailed information about your medical condition, including your diagnosis, symptoms, and treatment history. Medical records are important to keep and can help back up your disability claim. You also need to be honest about your disability. If you exaggerate your limitations or fail to disclose important information, your claim may be denied. A doctor’s note or any evidence of a clinical physician’s opinion about your condition can help prove your disability.

Most long-term disability policies have a deadline for filing a claim. If you miss this deadline, your claim may be denied. It is important to file your claim as soon as possible, as your disability develops and your doctor or clinical physician gives you his or her professional opinion about your condition. 

Not including the necessary evidence needed to support the existence of your disability can be another detrimental mistake when you file your claim. When you file a long-term disability claim, you need to provide plenty of evidence to support your claim. This evidence can include medical records, letters from your doctor, and statements from friends or family members. The more evidence you can provide, the stronger your claim will be.

Steps to Take if a Long-Term Disability Claim Is Denied

There are steps you can take if your long term disability claim is denied by your insurance company. Reviewing the denial letter, comparing it to your insurance policy, obtaining more evidence, appealing the denial, and filing a lawsuit can all be options to help you get coverage for your long term disability.

Reviewing the insurance company’s denial letter is the first step. The denial letter will explain why your claim was denied. Be sure you understand the reasons for the denial so that you can address them in your appeal. Reviewing the terms of your long-term disability insurance policy will benefit you in your appeal. 

Your policy will have a definition of disability. Be sure you understand the definition of disability in your policy so that you can argue that you meet the requirements. Obtaining more evidence to support the existence of your disability can assist you in your appeal or lawsuit. The more evidence you can provide to support your claim, the stronger your appeal will be. This evidence can include medical records and history, list of prescriptions, and tests. You can appeal the denial of your claim back to the insurance company. 

You have the right to appeal the denial of your claim. The appeal process will vary depending on the insurance company. Be sure to follow the instructions in the denial letter, or what your disability insurance attorney advises you to do. 

If you are not satisfied with the outcome of your appeal, you may want to consider hiring a disability insurance attorney. An attorney can help you understand your rights and options, and he or she can represent you in your lawsuit. Filing an appeal can be a complex and time-consuming process. Following these alternatives can increase your chances of getting the coverage and benefits you deserve.

Chicago personal injury and workers’ compensation attorney Howard Ankin has a passion for justice and a relentless commitment to defending injured victims throughout the Chicagoland area. With decades of experience achieving justice on behalf of the people of Chicago, Howard has earned a reputation as a proven leader in and out of the courtroom. Respected by peers and clients alike, Howard’s multifaceted approach to the law and empathetic nature have secured him a spot as an influential figure in the Illinois legal system.

Years of Experience: More than 30 years
Illinois Registration Status: Active
Bar & Court Admissions: Illinois State Bar Association, U.S. District Court, Northern District of Illinois, U.S. District Court, Central District of Illinois
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