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When your insurance company doesn't fulfill its obligations

Most Americans are aware of the importance of homeowner's insurance, health insurance, car insurance, and life insurance, but when it comes to disability insurance there seems to be a bit more of a disconnect. There are a variety of reasons for this, but the bottom line is that not enough Americans have the coverage they need if they end up becoming disabled.

As far as long-term disability insurance options, there are several. Many employers provide short-term disability as an automatic benefit to employees, who have the option to purchase group long-term disability coverage. The idea behind such coverage, of course, is to replace portion of the insured's income so that they can continue to pay the bills while they are recovering. 

Private long-term disability policies have more flexibility than group plans, but are more expensive. For those looking into private coverage, it is important to make a wise selection of coverage, making sure that the terms of the policy are well understood. One should pay particular attention to the level of income that is replaced, when coverage kicks in, how long coverage lasts, and whether any disabilities are not covered under the policy.

One should also be aware of what to do in the unfortunate event that their insurance company does not abide by the terms of the policy. It is not unheard of for insurance companies to dispute whether an insured is disabled or the extent to which they are disabled, and to refuse coverage on such a basis. These disputes can be challenging for a disabled individual who needs that coverage to pay bills while they are unable to work.

Those facing such a situation should contact an attorney who understands how to hold insurance companies accountable for their obligations under a long-term disability policy.

Source: Huffington Post, “Why Disability Insurance Is Critical,” April 30, 2014. 

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