LTD Approval Letters

Monday, April 9th, 2007

In previous blog entries I discussed some of the problems relating to Social Security Administration decisions that purported to be fully favorable, but in actuality were not. The same problem arises in the long term disability context.

After a two and a half year battle, I was finally able to persuade with Trustmark that my client was entitled to benefits under its disability policy. I received a letter that explained the claimant would be paid for the maximum 12 months under the policy. The only problem is that the policy was for a 24 month period. I contacted the claims representative, who said it was an underwriting mistake, and that the matter could be rectified easily.

When finally securing approval of benefits a claimant is apt to be elated and relieved. That euphoria is likely to cause the claimant to overlook the full extent of benefits that may be due. For example, during the period of disability, there is usually a premium waiver, which should be reimbursed, but is frequently disregarded. Care should be taken to ensure that all benefits are correctly calculated and included.

A claimant might also decide to forfeit the full extent of the benefits that are due for fear that the carrier may reverse its position altogether, but that concern should be ignored. If an insurer approves disability benefits, but then reverses its decision after a claimant seeks to recover additional benefits due under a policy, its explanation for the reversal will not be credible. If the matter resorts to litgation any court will readily see through the insurer’s subterfuge.

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