LTD Litigation

When litigation ensues involving a claim under a group long term disability (“LTD”) plan courts are frequently reluctant to allow the claimant to introduce evidence that was not previously submitted to the insurance company that denied or terminated the benefits. Therefore, it is critical to ensure that all necessary medical and vocational evidence is supplied before the insurance company renders its final decision.

As long as the insurance company can perceive any arguable deficiency in the evidence it will resort to its default position, which is to avoid paying benefits. If there is no perceivable deficiency, then the insurance company will probably try to concoct a reason to deny or terminate LTD benefits by relying on its staff doctors or repeatedly used outside doctors to write a review rejecting the treating doctors’ opinions.

Even if a claimant furnishes evidence that reveals the insurer’s utter failure to review the evidence objectively and fairly, the insurer often ignores the obvious to deny or terminate benefits in order to require the claimant to proceed to litigation. The insurer’s goal is to reduce its liability through a lump sum “buy out” of the claimant’s claim for a percentage of its present value. That tactic is sometimes called “post-claim underwriting.”

I just had two LTD claims, one with Hartford and the other with CIGNA, following the pattern of post claim underwriting. In both instances, I had been involved at the administrative level and ensured that the medical and vocational evidence overwhelmingly supported the claimants’ position. And in both instances the insurance companies wrote to the courts requesting settlement conferences, where they sought a buy out of the claim at a discount.

Since insurance companies are not going to end the practice of post claim underwriting, it is critical to ensure that the claim file includes all the necessary evidence before the insurer makes its final decision. Many attorneys will not even consider litigating a case when they have not had the opportunity to submit evidence prior to litigation.