Long-term disability insurance is crucial for your financial stability and the protection of your loved ones. While most working adults may qualify to receive Social Security Disability Insurance (SSDI) benefits when they have a disabling medical condition that will last for a year or longer, SSDI will likely leave a massive gap between what you used to earn and what the Social Security Administration will pay you in benefits.
Long-term disability insurance, whether secured on your own or through your employer, can be a crucial protection against the financial consequences of a major illness or an injury. Unfortunately, while you have paid your premiums for years, the company may try to avoid its obligations to you when you make a claim.
Bad faith insurance laws make it illegal for insurance companies to intentionally refuse to uphold the policies they offered to customers. How can you determine if your issues when negotiating with the insurance company for disability benefits are bad faith practices?
Review your policy
The most important step to take when making a long-term disability claim or other sizable claims against an insurance policy is to review the coverage paperwork. Some people have incorrect assumptions about what benefits they will receive or how much the insurance company will pay. You need to double-check the policy itself to ensure that you do not have unreasonable expectations.
Learn what constitutes bad faith insurance practices
If you understand what the policy offers and you still believe the company has not treated you fairly, you need to compare your situation to the rules for bad faith insurance. There are three ways that insurance companies most frequently act in bad faith when handling claims.
The first is to deny an obviously valid claim. The second is to delay payout on a claim, possibly leaving the claimant in financial duress as a result. Finally, insurance companies may offer inappropriately low settlements to absolve themselves of liability while also leaving the policyholder without the coverage they deserve based on the policy they have carried.
Some insurance companies will also ignore medical evidence of the disability or exaggerate the claimant’s abilities observed during surveillance to prevent them from receiving disability benefits. If the company providing your long-term disability insurance acted in bad faith, you may be able to take them to court and secure not only the coverage you deserve but possibly also punitive damages because of the company’s misconduct.
Learning more about bad faith insurance and long-term disability coverage can help you better handle stressful negotiations with your insurance provider.