Long-term disability (LTD) insurance puts two opposing interests against each other. On the one side, it is a person in need of benefits to continue after becoming disabled. On the other is their insurance company who would like to pay as little as possible.
The term “bad faith” means making a promise that you have little intention to keep. In the realm of insurance, a bad faith denial – as we’ve written before – is where an insurance company makes it clear that they never intended to fulfill their contract.
Deliberately confusing standards
The first sign that your insurance company wants to deny your claim is simply the standards for claim denials in the first place. It’s no secret that contracts and legal language make for dense reading material, but insurance policy language can take that even further. If the terms of denial aren’t initially clear in your policy, it could be the groundwork for denying any claim.
Whenever a person makes a claim to an insurer, the insurer will research it. Good research takes time and involves:
- Medical record review
And those things don’t happen overnight. If your insurer denies your LTD claim too quickly, citing “research,” it could be a sign that they never intended to follow through on their promise.
Willful legal negligence
Simply put, intentionally ignoring national and local legal statutes to deny your claim is a dare to claimants. It puts pressure on the person with the disability to hold the insurer to the law, and in a perfect world, that shouldn’t happen. Yet, intentional legal negligence is a common aspect of disability insurance disputes.
Remember: insurance companies want to turn a profit
When we talk about LTD insurance, we are not talking about Social Security Disability (SSD); we’re talking about a policy bought from an insurance company. SSD has stringent policies and needs, but at the basic level, it is a program designed to supply benefits without thought to profits.
A long-term disability insurance company’s entire business model is to pay as little for every claim as possible. That business model, however, can lead to some unscrupulous behavior. If your disability benefits are at risk due to an insurer’s “bad faith,” you have every right to seek legal action.