Insurance companies are absolutely, crazy paranoid about not having enough information about YOU and your claim. They have always been an industry overburdened with paperwork anyway, but when it comes to disability claims, well……chasing paperwork is the driving force for most of what insurers do, and what they will deny claims for.
I’ve been hearing from far too many people lately that they think once they establish disability, it’s all over. That is never going to be true – ever. Because insurers rely on information from other people and third-parties, the information paranoia will always exist, and insureds will be continuously asked for update information. In addition, insurers will always be entwined with surveillance and data checks looking for “gotcha’” ways to deny claims.
IDI requests for information can also be made every 30 days, but IDI polices contain provisions that prevent “failure to provide” denials before 90 days. Still, having to provide update information every 90 days sometimes drives insureds crazy.
The lesson here is that claimants and insureds will never get to a place where they are presumed to be permanently disabled and won’t be bothered with requests for paperwork. To say that insurance companies have gone information form crazy is, of course, an understatement.
Most insureds who buy insurance policies generally miss seeing the procedures that are required to make sure you have the right “forms”. Agencies have “bins of forms” and the agents go right down the line taking, “this form”, and “that form” required by the industry, or the state. It never gets better when claim applications happen either. Sun Life at one time had an application packet of more than 20 pages. It almost seems as though claimants are presumed to be mentally and physically fit and healthy in order to make a claim for disabled status.
The Hartford has a 15 page questionnaire, which they ask their insureds to complete. And, let’s not forget that the Social Security Administration has in excess of 25 pages with multiple files to complete online applications for SSDI. While the government might be forgiven for such monstrous applications, insurance companies shouldn’t be.
Wouldn’t it make sense that someone who is disabled might not have the physical or mental stamina to complete these applications and update forms? One would think so, but alas, the insurance industry and their obsessive paranoia prevails.
Internally, insurance companies use “flups” (follow-ups) to keep their claims handlers in line for performance management. Generally, claims handlers are required to “touch” claims at least once every 30 days. Therefore, if a claims handler has a 200 claim block, that’s 200 claims that require an action every 30 days.
Claims handlers at Unum get fired for changing their flups without taking an action. Most insureds get frequent requests for update information for no other reason than the claims handler is required to take some action every 30 days in order to get an “Exceeds” performance rating. There is no thought given to the the medical condition of the insured, or the insured’s ability to keep up with the paperwork.
Therefore, frequent paperwork from your disability insurer is the outward evidence of “information paranoia” manifested throughout the process to prevent backlogs, which are near death to any disability insurer. Backlogs are devastating to insurers because they represent “lost profits” since the claims are untouched. Still, insureds are expected to keep up with the excessive requests regardless of how nonsensical they are.