I was hoping to get a settlement from The Standard, but they declined. Do they ever offer settlements?
Not very often at all. Disability claim settlements are called “compromised” settlements because both insurer and claimant give up value in order to resolve the claim. Unum has always been different in that the company figured out a way to make a profit on lump-sum payouts. Both The Standard and Mass Mutual have nearly the same response for settlement requests, “We pay claims that should be paid, and deny those that should be denied. We support our claims process to fairly do that.” Unum is the claims guru and it never hurts to ask.
Why are my doctor and I constantly asked to submit paperwork? Sometimes it seems as though no amount of paperwork will result in a payable claim.
For most insurers, claims handlers are performance managed on how often they “touch claims.” This is so important that management often has a rule that a request must go out on all claims every 30-45 days. BACKLOGS are seen by management as the killer of profits. Untouched LTD or IDI claims results in lost profit. Therefore, as part of a claims handler’s performance management, claims handler’s diary systems are reviewed as to how often they are requesting and following-up on paperwork. You won’t get an “Exceeds” performance rating if you “don’t touch your claims.” When I worked for Unum I was the only claims handler who was able to manage my block of claims at 0 growth, meaning claims in equaled claims out. Normally, most claims handlers can’t do that and backlogs become a problem.
Why doesn’t my insurer understand the nature of my disease and how it disables me?
The short answer is, “They don’t have to”, especially for the ERISA folks. Federal laws give Plan Administrators permission, called “discretionary authority” to decide for themselves who gets paid, who doesn’t, and how the Plan should be interpreted. This is why most insurers have elaborate internal medical review processes that back up denial decisions. But, make no mistake, disability insurers have DISCRETIONARY AUTHORITY to make claims decisions on their own, and they do, whether they make sense or not. It’s up to insureds and their representatives to keep them honest.
