Lately, I’ve been contacted by IDI insureds who want to file for disability using a date of disability in the distant past, somewhere between 3-10 years ago. Therefore, it’s important for me to share information that suggests such late filings may prove more difficult than insureds think.
All IDI contracts contain “Time of Filing” provisions that usually state insureds must file within 90 days after the end of a claimed period of disability. The provision also opens the door to submit information within a year due to mental incapacity, or, “as soon as possible.”
Despite this provision, there are a growing number of insureds who think they can submit claims whenever they want to. When they do, insurers document “late filing” and the possibility that since insureds waited so long to file, they actually “prejudiced” their investigations and claims cannot be paid.
When initial IDI applications are filed with dates of disability in the past the following investigative information and conditions must be met:
- Insureds must be prepared to prove that their treating physicians recommended total (or work reductions) at the time they stopped working, presumably in the past.
- Patient notes, lab reports and any other medical records must be submitted from all treating physicians just prior to, and subsequent of the date of claimed disability. These documents should contain written, treating physician notes recommending total disability at that time.
- If self-employed, insureds will be asked to submit monthly Profit and Loss Statements from the date of disability forward. (Think how many this would be if claiming a date of disability in the past!)
- Insureds will be asked to submit business and personal tax returns at least 3 months prior to date of disability. (Same comment as above.)
- Physicians would need to submit monthly CPT or billing codes prior to date of disability to present.
Attempting to submit statements from CURRENT physicians stating you were disabled in the past are not credible due to the fact that these physicians may not even have treated you when you stopped working. Bottom line – insureds would be asked to submit all physician treatment notes, CPT/CDT codes, and all financial information prior, and subsequent to, an earlier date of disability.
Recently, I went 20 rounds with a caller who insisted she didn’t need to do that since her doctors told her in 2017, “There’s nothing more I can do for you”, so she just dropped out of appropriate and regular care for 3 years and now wants to file for disability.
There seems to be a great deal of confusion and misunderstanding concerning an IDI provision that suggests the “proof” requirement can be waived if the insurance company decides nothing more can be done for you.” Insureds looking to jump over this provision assume that when their doctors say nothing more can be done, they just stop going. THIS IS NOT HOW THIS PROVISION WORKS.
It is the insurance company’s discretion to decide whether the proof of claim provision is enforced, not insureds who by themselves decide to stop medical care. Dropping out of medical care is NEVER an insured’s decision, but belongs to the insurance company, who after a period of time determines from medical notes and treatment that the insured is at MMI and has nothing to be gained from further evaluation.
Insureds invariably attempt to put a round peg into the square hole of “waive further treatment” when it is the insurance company’s discretion to decide when no further treatment applies. Insureds who just “stop going” to medical consultations violate “proof of claim” provisions and claims can be denied on that basis.
Therefore, raising the lack of medical care on a claim dated in the past won’t get you too far. In general, in order for claims to be paid, insureds must submit “proof of medical disability” for every period claimed – EVERY PERIOD OF TIME CLAIMED. If you can’t do that because the date of disability is too far in the past, then it isn’t prudent to expect insurers to pay benefits for periods of time in which there is no existing proof of disability.
Having said all of the above, it is possible for insureds to claim dates of disability for periods in the past IF they can produce medical records and other documentation certifying total disability. Admittedly, this is going to be a real administrative nightmare, but many people think the amount of past due benefits far outweighs the hassle.
IDI insureds should always file timely claims. There is nothing to be gained from waiting and waiting to file. When I’ve asked insureds, “Why did you wait so long?”, they responded, “I thought I would get better.”
The best IDI coverage for self-employed insureds is to have IDI policies backed up with BOE (Business Overhead Expense) policies to fund businesses until it can be determined whether to sell the business or return to it. Although multiple IDI polices seems a good option for self-employed insureds, it is far better to include a BOE policy in lieu of multiple IDI policies.
I hope this added information is helpful to IDI insureds. I think perhaps the new advent of disability claims may be due to COVID-19, lack of earnings, and fear of an uncertain financial future. Still, filing an IDI disability claim with a date of disability way in the past, may be more than you thought.
Always file timely claims and be careful about “waiving proof of claim” provisions on your own volition. The proper way of doing that is to request insurers waive future proof of claim only after total disability has been made reasonably clear, and physicians document that future treatment will have no benefit.