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Category: Disability Insurance

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How Does “Any Occupation” Disability Insurance Work?

Fri Nov 16th, 2018 on     Disability Insurance,    

Miami Disability Insurance Lawyers If you’ve had your disability insurance claim wrongfully denied, undervalued, delayed, or otherwise mishandled by your insurer, then you may be feeling overwhelmed, and for good reason.  Though your priority should be managing your health in the wake of a disability, it’s critical that you secure benefits that will serve as “income replacement” if you cannot return to work. Insurers are frequently aggressive about denying claims, and in fact, they often wrongfully deny disability benefits claims that are legitimate.  Insurance companies may feel justified in making denial decisions due to the insurance policy including a strict “any occupation” definition of disability.  It’s important that you understand what “any occupation” disability insurance is and what circumstances may allow you to secure benefits. What is “Any Occupation” Disability Insurance? Private disability insurance plans generally feature one of two different definitions of a disabling condition: any occupation and own occupation. Own occupation allows for the receipt of benefits in the event that the policyholder is incapable of performing the material duties of their existing occupation.  By contrast, any occupation only allows for the receipt of benefits in the event that the policyholder is rendered incapable of performing the material duties of any occupation for which he or she may reasonably become qualified. Any occupation disability insurance therefore requires that the policyholder establish that they are impaired to the degree that they cannot secure an alternative job for which they are or can become reasonably qualified. Reasonably Qualified to Perform […]

Insurers May Be Liable for Inadequate Coverage Recommendations

Fri Sep 21st, 2018 on     Disability Insurance,    

In some insurance disputes — disability insurance disputes included — policyholders may be surprised to find that their coverage is actually inadequate to pay for their losses.  Insurance agents are not always scrupulous or comprehensive in explaining the terms of the policy that you purchased.  In an effort to make the sale, the insurance agent may be hesitant to explain the contours of such coverage and what benefits you are likely to obtain, and in fact, the insurance agent may recommend a policy that is fundamentally inadequate for your needs and preferences. Fortunately, Florida law gives policyholders the right to sue and recover damages when the insurance company and/or their representatives have misrepresented aspects of the policy. Let’s explore some of the basics. Insurance Agents Have a Duty to Accurately Represent Coverage In Florida, insurance companies and their various representatives — including insurance agents, of course — must clearly and accurately explain the terms of the policy that they’re selling.  They may not misrepresent any relevant aspect of the policy, such as the amount of coverage.  Whether the company representative misrepresented information to you depends on the circumstances of the case. For example, if a simple statement made by the insurance agent would not have misled the average, reasonably prudent policyholder, then in all likelihood, the agent has not violated their duty and misrepresented information.  On the other hand, if the representative knew that your reasonable expectations of the policy were different than the actual terms of the policy, then […]

Disability Insurance: A Brief Look at Occupational Definitions

Fri Sep 7th, 2018 on     Disability Insurance,    

As a disability insurance policyholder, whether you are entitled to secure benefits for your disabling illness, injury, or other condition will depend primarily on your ability to demonstrate that your circumstances qualify you as “disabled” pursuant to the language of your insurance plan.  Insurers are incentivized to interpret plan definitions (and the severity and extent of your condition) in a manner that is unfavorable to your interests — if the insurer can plausibly deny your disability benefits claim, then they can save substantially on costs that would have otherwise been paid out to you. Given the importance of the “disability” definition for your benefits claim, and the likelihood that your insurer will attempt to muddy the waters by interpreting it — and your condition — in a way that is opposed to your interests, it’s worth understanding just how disability is defined in your plan so that you can effectively counter the arguments made by the insurer. Let’s take a look. Variable Definitions of Disability Disability insurance plans either have an own-occupation or an any-occupation definition of what constitutes a “disabling” condition.  The definition described in your plan can have a significant impact on your ability to recover benefits. Own Occupation When a disability insurance policy includes an own-occupation definition of a “disabling” condition, claimants may be awarded benefits so long as they can show that their illness, injury, or other condition has caused them to be unable to perform the major duties of their current occupation. For example, if […]

How Mediation Can Help Insurers and Claimants Resolve Their Dispute

Fri Aug 17th, 2018 on     Disability Insurance,    

In Florida, and throughout the country, mediation of complex insurance disputes (whether a disability insurance dispute, health insurance dispute, or otherwise) is a common strategic option employed to resolve the conflict before litigation.  Through the mediation process, the involved parties — insurer and policyholder — can negotiate a favorable settlement that satisfies their expectations while avoiding the hassles and difficulties typically associated with insurance litigation. Litigation May Be Fraught With Difficulties Litigation can be somewhat risky for many plaintiffs, whether in the insurance context or otherwise.  Going through with trial litigation can be time-consuming, expensive, emotionally frustrating, and uncertain.  For example, if you have suffered a disabling injury and are unable to return to work, then the prospect of litigation — and the possibility of a long and demanding trial process — may be undesirable. Generally speaking, insurance policyholders hope to secure benefits within a reasonable timeframe.  Litigation not only extends that period, but may expose the policyholder (and their insurance dispute) to public criticism, thus damaging other aspects of their life.  Thus, where possible, a negotiated settlement is usually preferred. How Mediation Can Lead to a Favorable Settlement Litigation is fundamentally hostile — each side is arrayed against the other, constantly seeking an advantage.  By contrast, mediation is a voluntary process where the disputing parties attempt to negotiate a settlement compromise in a more collaborative environment.  During a mediation, a neutral third-party mediator is selected.  The mediator will hear out the arguments presented by each party (in a less […]

What Are Residual Disability Benefits?

Fri Aug 10th, 2018 on     Disability Insurance,    

Residual disability benefits are common, in Florida and throughout the country — whether in the form of an insurance rider on a total coverage plan, or as a standalone income replacement policy — as a means with which to ensure that the claimant can secure at least some benefits after suffering a disabling event that is not necessarily catastrophic. For example, if you are injured in a car accident, then you may suffer a disability in the form of back spasms, but this disability may not be “total” in the sense that you might be capable of performing your existing job.  Residual benefits open up insurance coverage, to an extent, by allowing you to recover for disabilities that effect certain job duties, but that do not necessarily prevent you from working altogether. Despite the fact that residual benefits are intended to fill the coverage gaps typical of total disability insurance policies, many insurers will challenge residual benefits claims and make it difficult for claimants to secure the benefits to which they’re entitled. Qualifying for Benefits Whether you actually qualify for residual benefits depends on the particularities of your insurance plan — there is no universal, consistent baseline for residual benefits, as plans can vary quite substantially.  Residual benefits are a form of partial income replacement, and as such, many plans involve a showing of income loss of a sufficiently significant degree.  For example, your plan may require that you demonstrate — post-disability — that your income has fallen at least […]

How Benefits for Psychiatric Conditions Can Be Limited

Tue Jul 31st, 2018 on     Disability Insurance,    

Disability insurance coverage can surprise many policyholders who put too much trust in their insurer to “do right” by them.  All too often, disability insurance policyholders believe that they are well-protected by their private policy, only to find that their insurer is taking steps to avoid or minimize the payout altogether. In many cases, the insurance contract itself includes language that could expose the policyholder to a dispute down the line, when they have actually been disabled.  It is increasingly common for insurers to include a limitation on benefits for disability claims that are premised on psychiatric conditions (i.e., mental disorders) — this limitation is commonly referred to as the “mental and nervous” provision. Let’s briefly consider the fundamentals. How the Mental and Nervous Provision Works Claimants may be initially confused by the application of the “mental and nervous” provision in their insurance policy, but it’s rather simple in effect.  The provision essentially limits the duration of benefits payments for disability claims where the cause of the disability at-issue is based exclusively on a psychiatric condition. Generally speaking, only the length of payments are limited, not the amount.  For example, if you have been suffering from a substance abuse condition (say, alcoholism), and the addiction is so serious that it has effectively rendered you disabled and unable to work, then you may be entitled to benefits, but only for a limited period of time — perhaps a two-year period. Insurance policies can vary quite a bit, but as a general […]

Disability Insurers May Offer to Buyout Claimants

Tue Jul 10th, 2018 on     Disability Insurance,    

Disability claimants may be surprised to find that — despite the fact that they have never lapsed on insurance payments and are submitting a reasonable disability benefits claim — the insurer response is unaccommodating.  Disability insurers employ a number of questionable tactics in order to force the claimant into a vulnerable position.  For example, if you have been rendered permanently disabled due to a degenerative condition, the insurer may deny your claim, delay your claim, or undervalue your claim.  Doing so gives the insurer substantial leverage during later negotiations. Oftentimes, disability insurers use the “lump sum buyout” to avoid having to pay long-term benefits, or to end the insurance dispute altogether.  Lump sum buyouts are not necessarily unfavorable to the claimant, however.  Accepting a lump sum buyout is a perfectly reasonable option in some cases. Let’s explore the basics of an insurance buyout. What is a Lump Sum Buyout? In the disability insurance context, a lump sum buyout — otherwise known as an insurance settlement — is effectively an offer to purchase the claim at-issue.  Stated simply, the insurer offers to pay some agreed-upon amount in a lump sum, and you (the disability claimant) must agree to abandon your legal rights under the policy.  You will not be entitled to receive further benefits under the policy, nor will you be entitled to sue the insurer for damages. Lump sum buyouts are often used as a way to clean up what may appear to a messy insurance dispute.  For example, rather […]

How Are ERISA-Covered Plans Different Than Standard Plans?

Fri Jun 29th, 2018 on     Disability Insurance,    

In 1974, the Employee Retirement Income Security Act (ERISA) was enacted, thus creating new standards governing private employee benefit plans — such as employer-sponsored disability, health, and welfare insurance, among other plans.  In Florida and elsewhere, ERISA does not require that employers purchase private insurance coverage for their employees, but it does impose a stricter set of rules on such plans so that employee-policyholders are protected from the potential abuses of plan administrators and others. If you are a private employee in Florida, and you are a participant in an employee-sponsored benefits plan, then in all likelihood your plan is ERISA-covered.  This not only ensures that your plan will be governed by federal law (i.e., ERISA regulation), as opposed to Florida law, but also subjects you to various advantages and disadvantages when it comes to litigating claims against the insurer. Consider the following. Fiduciary Duties Give Rise to Legal Action ERISA establishes a range of fiduciary duties and obligations, which gives policyholders new opportunities to sue and recover damages for fiduciary violations.  For example, suppose that you are a policyholder in an employer-sponsored welfare plan.  You later discover that the funds were mishandled by the fiduciaries (i.e., the plan administrator and their agents), and this will have a substantial impact on your later benefits.  You would be entitled under ERISA to sue the fiduciaries and secure damages as compensation for your various losses. Florida Bad Faith Law is Preempted Under state law, section 624.155 of the Florida Statutes establishes bad […]

Are Insurance Benefits Affected by Damages Recovered in a Lawsuit?

Fri Jun 15th, 2018 on     Disability Insurance,    

Oftentimes, insurance policyholders who are already receiving benefits (or who intend to submit an application for benefits) are concerned about how their qualification for such benefits will be influenced by their success in litigation.  This is a reasonable concern, of course — it seems sensible that one’s disability benefits may be affected by their receipt of hundreds of thousands of dollars, or even millions of dollars in damages from the liable defendant in a personal injury lawsuit. In reality, however, the effect of a settlement or verdict on one’s receipt of benefits is not necessarily straightforward.  Whether these concerns are valid is fundamentally dependent on the circumstances. Let’s take a brief look at the situation. Income-Based Benefits May Be Affected In Florida, as in other states, private insurance coverage — such as disability insurance, health insurance, and property insurance, among other policies — is generally not affected by the receipt of damages in a settlement or verdict.  It’s a rather simple calculus, in fact.  Private benefits are typically not awarded based on “financial need” or income, and so by securing substantial financial resources through a lawsuit, you do not influence the provision of benefits under your existing coverage. For example, suppose that you have entered into an agreement for private disability insurance coverage.  You subsequently are involved in a motor vehicle accident where you suffer injuries that give rise to a disabling condition.  In your lawsuit, however, you are awarded $1M in damages. Unless your policy includes some provision that […]

How Are Disability Benefits Calculated?

Fri Jun 8th, 2018 on     Disability Insurance,    

In Florida, and throughout the country, whether you receive disability benefits — and the benefits amount that you are awarded by your insurer — depends largely on the disabling condition at-issue and the provisions of insurance policy.  As policies can vary quite substantially, you and your attorney will have to closely evaluate the language of your insurance agreement in order to determine the benefits to which you’re entitled. Generally speaking, the disability benefits calculation begins with the insurer’s determination of your condition.  Some policies have stricter, more restrictive definitions of “disability,” which require that the policyholder demonstrate that they cannot work any job (not just their current job).  In any case, if you qualify as “disabled” under the plan, then you may receive disability benefits. Benefits are very likely to differ based on the structure of your disability insurance plan, however.  Let’s take a look. Percentage-Based Income Replacement In the private disability insurance context, the benefits you receive are often a critical issue in negotiations when initially signing onto an insurance plan.  Percentage-based benefits are desirable for knowledge workers and other white-collar workers with high monthly wages.  For example, if you are a medical professional earning $20,000 per month, then 50 percent of your monthly wages in benefits will be $10,000 — though it represents a substantial drop in total income, it is likely to be sufficient to cover your immediate financial needs. Benefits Capped Out Bear in mind that in many policies where the benefits are paid out based […]

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