Disability insurers are being investigated by a Senate committee regarding their possible responsibility in causing a backlog of pending claims before the Social Security Administration, the New York Times reports ("Senate Asks 9 Insurers To Furnish Information"). Unum, Cigna, MetLife, Aetna, Hartford Life, Lincoln, Prudential, Standard and Reliance Standard have received letters for a Senate committee regarding their practices of compelling their insureds to apply for Social Security disability benefits.
Most disability insurance policies allow the insurance company to reduce their payments to the claimant if they begin receiving Social Security disability benefits. Therefore, many policies require the insured to apply for the Social Security benefits. However, most disability insurance policies pay benefits for a period of 24 years if the claimant cannot perform their last job; this is often known as "own occupation" coverage. Social Security disability eligibility requires the claimant be disabled from performing any job, not just their last job. The backlog of pending Social Security claims has stretched to over a year, a delay that Senator Charles Grassley labeled "abominable."
Interesting case, however, the law should be more strictly defined, to avoid such cases. Insurance companies can hardly "force" somebody within law. It shows problems and difficulty of social system more, than anything else...
Take care!
Lorne
Posted by: Life Insurance Canada | July 29, 2008 at 06:05 PM
Haha @ Life Ins. Canada. Sure, they CAN'T Force you, BUT if you don't cooperate with them and the third party they often hire (e.g. Allsup), then you can forget ever being considered for your disability benefits. Cooperation is often more important than your health! It happened to me from Reliance Standard Life a few years ago. I am afraid Lorne is more than willing to try to hide many of these disability horrors, and throw blame on the law or society itself. BLAHHH!
Posted by: Lissa | January 17, 2009 at 08:14 AM