Disability Claims Solutions


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I have a Lloyd’s of London disability claim that is taking more than 6 months to do a review. Is this normal for this insurer?

Lloyd’s of London insurance is generally considered the “kingship” of disability products that also hefts a large premium to go along with it. Overall benefits are maxed out over $1M, and clearly not everyone can afford to buy the coverage.

Although claims are managed by reinsurers such as DMS, every review and decision goes through Lloyd’s causing long delays and requests for additional information that eventually become unreasonable. Six months is the short-end of claim review from Lloyd’s.

Lloyd’s of London operates on what I describe as a total socialistic EU mentality where insureds are considered members of its fiefdom and subject to maximum medical information review that is redundant and excessive. Americans who buy Lloyd’s policies are encouraged by medical and dental “Associations” to pay the exorbitant premiums even though insureds may never receive the benefits.

Reinsurers such as Disability Management Services operate under slightly different rules to begin with. “Reinsurance” is assumption of risk by one insurance company for another insurance company. Alone, DMS is referred to by me as the IME frequenter since the company generally requests IMEs several times a year. Neither Lloyd’s of London nor DMS are going to provide timely and quick claims decisions. The product simply isn’t worth the high premium cost since insureds are forced to assume their own risk of ever getting paid at all.

Why am I getting so many letters from Unum? I’ve been on claim 15 years?

Unum’s claim managers require claims handlers to “touch” claims every thirty days. This means once a claimant or an insured provides information, the claim is immediately “flupped” (follow-up) for 30 days. The claims handler must then figure out what to do to “touch” the claim again, for example, making a call, requesting medical information, sending out a questionnaire etc. Therefore, that’s why a lot of requests seem redundant.

Claims handlers are performance managed in accordance with their ability to “flup” you on a regular basis, which is really very irritating to most insureds. Managers require the 30-day actions to avoid backlogs of claims that are never reviewed.

I believe Prudential is conducting surveillance on me for weeks at a time and on a frequent basis. Do I have to put up with this?

First of all, no insurance company conducts surveillance for long periods of time, or frequently for that matter. The cost of surveillance, which is usually around $1,200 for a three-day investigation is not cost effective to the claim reserve on low value disability claims – “low value” being under $10,000 – $15,000 per month.

Reasonable insurance surveillance IS something you need to learn to put up with because insurance companies do have the right to investigate you in this way. I am always frustrated by persons who tell me, “I don’t care if they do surveillance, I don’t do anything wrong!” because surveillance is interpretative and difficult to dispute as in “seeing is believing.”

It’s important to keep surveillance in perspective, I think, and refrain from imagining peeping Toms behind every bush. Only in very unique circumstances, and for high-value claims do insurance companies conduct frequent or long-term surveillance.