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Provident Life Tries to Short-End Disabled Doctor

Disability Claim Denials

Disability insurance companies may try to classify your disability claim as one resulting from “sickness” rather than “accident” or “injury.”  The difference matters because most disability insurance policies include separate sickness and accident provisions that affect limits of disability payment.

For example, a typical disability insurance policy may stipulate that if your disability is caused by accident or injury, then you are eligible to receive monthly payments from the time of your disability for life.  But if, on the other hand, your disability results from sickness rather than accident or injury, then you may only be eligible to receive disability payments until you are 65 years old.  Insurance companies may often times define these terms ambiguously, if at all, so they can wrap the “appropriate” definition around your disability claim.

A recent case from the Central District of California, August v. Provident Life & Accident Ins. Co., illustrates how disability insurance companies try to manipulate these terms in ways to terminate disability insurance claims.  772 F. Supp. 2d 1197 (C.D. Cal. 2011).  In this case, a disabled doctor sued Provident Life when it denied him accidental disability benefits.  The doctor injured his neck when he fell skiing.  The injury made it impossible for him to continue working.  When he originally filed the disability insurance claim he marked the claim as accidental injury rather than sickness.  Provident Life, however, coded his claim as a sickness claim; therefore, without the disabled doctor’s knowledge, Provident Life scheduled termination of his disability payments.

Ten years later, Provident Life notified the disabled doctor that some disability benefits would terminate on his 65th birthday rather than continue for life, per the sickness provision of his contract.  Even though the disabled doctor originally marked his claim as “accidental” and even though he had submitted to Provident Life 26 progress reports, wherein he indicated his injury as “accident” rather than “sickness,” Provident Life attempted to terminate his disability benefits by classifying his skiing accident as a sickness claim rather than accident claim.

Fortunately, Provident Life’s attempt to short-end the disabled claimant failed.  Provident Life was estopped from asserting the disabled doctor’s claim was based on sickness rather than accident because it failed to fully inform the disabled doctor of his benefits, coverage, time limits and other provisions when he filed his claim.  Instead it waited until ten years after payment began.  The court in California said, “[we find] incontrovertible evidence that [Provident Life]’s dilatory conduct caused Plaintiff to suffer a disadvantage and that [Provident Life] should not be permitted to exploit the disadvantage they inflicted on Plaintiff.”

Disability insurance companies often try to capitalize on your policy misunderstandings and mistakes.  As the above case demonstrates, they also try taking advantage even when you understand your policy provisions and make no mistakes when filing a claim.  Disability insurance companies can be relentless, but the obstacles they impose are not insurmountable.  When faced with a possible disability insurance claim, it is important you consult with an experienced attorney so you can understand your policy and take control over your financial future.

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