The rationale behind the purchase of disability insurance is to provide an economic safeguard against unforeseen sickness or accidental injury.  When misfortune occurs, economic hardship results.  And if benefits are denied without justification, the premiums invested in insurance coverage appear worthless.  All is not lost, though, because there are ways to fight back.

Step 1: Create an Evidentiary Record

Fortunately, an insured has legal rights. The starting point is to make sure the insurance company has received all of the relevant documentation.  The insurance company needs to have a description of employment duties and medical records demonstrating the insured’s inability to meet the necessary work requirements.

Step 2: Consult with an Attorney

Next, we recommend consulting with an experienced disability insurance law firm. An attorney can contact the insurance company, clarify the reasons for the denial, and begin the process of mounting a challenge to the unfavorable determination.  In most situations, the insurance company will provide a copy of its claim file in the event of a denial; and an experienced attorney can carefully scrutinize those records to find errors and begin to formulate a strategy to combat the denial.

Step 3: Exhaust Appeals

If benefits have been unjustifiably denied, an experienced attorney can assist in challenging denials that are based on a misreading of the policy or an insurance company’s assertion that insufficient evidence has been submitted.  An appeal of the denial of benefits generally requires more than a statement of disagreement or a note from the treating doctor recertifying disability and usually necessitates the submission of supporting documentation, such as medical records.  In most instances, only one appeal is allowed, and expert assistance is needed to make sure the appeal is done correctly.

Step 4: Review Applicable Law and Evaluate a Court Claim

Depending on whether the insurance coverage is sponsored by an employer or purchased directly through an insurance agent, a different set of laws may apply.  A federal law called the Employee Retirement Income Security Act of 1974 (ERISA), generally applies to claims submitted under an employer-sponsored or employee organization plans, while directly purchased coverage is usually subject to state laws, including laws in certain states that allow for “bad faith” damages in the event benefits are denied without a reasonable basis.  If a claim appeal is unsuccessful and the insurance company upholds the denial, an attorney will review the merits of your claim to determine whether you should file a civil complaint in court and identify the appropriate court and specific claims that need to be brought.

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