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Disability Management Services, or DMS may be playing a “word game” that could cost an insured $1M in lump sum disability payment. As third-party adjudicators of Lloyd’s of London insurance the company has a strategy hook I think insureds need to know about.

Lloyd’s policy defines disability as follows:

“Permanent Total Disability means that if solely due to an Accident or Sickness, You are not able to perform the substantial and material duties of Your Occupation and in the of Competent Medical Authority recovery from such disability is not expect, even if You are at work in another occupation.”

There is evidence to suggest that DMS approached the insured’s treating physicians with the question, “Is this insured PERMANENTLY DISABLED?” Please note that the definition of disability itself only requires the insured to be disabled from his own occupation. The “positioning of the language in question” is suggesting the insured must be totally and permanently disabled from doing any job”, an interpretation of 24 month change in disability that does not actually exist in the policy itself.

In my opinion, DMS is deliberately asking physicians about “permanent total disability” in order to get their desired answer of,”No.” The truth is, the insured need only be unable to perform his own occupation. DMS is smart enough to position medical requests using the title of the contract provision, but not the actual definition.

I have managed many claims through DMS, and there are some very good claims specialists and there are some pretty bad ones. I don’t entirely blame the claims handler, because Lloyd’s of London always puts insureds through an overabundance of investigation before paying claims. However, the misrepresentation to treatment providers using contract language to obtain a desired result, IS the fault of the claims handler and should be challenged.

DMS needs to be held accountable for calling a “thing a thing”, particularly when we’re speaking about a contract.

I don’t recommend to buyers that they invest in Lloyd’s of London policies because they are not generally approved policies in the United States, and charge very high premiums for very high benefits that are rarely paid. DMS should be the topic of a more in depth post sometime in the future.