Insult to Injury

Chapter FourGO FIGURE

51

INSURANCE COMPANIES CERTAINLY DO NOT OWE BENEFITS TO EVERYone who files a claim. Many claims are properly denied. In addition, some insurers simply pay the benefits they owe. But if an insurance company—any type of insurance company—wants to dramatically increase revenues by denying or terminating valid claims, it can do so. Although the numbers used here are based on estimates, in the case of disability insurance claims the denial analysis might look something like this.

There are three underlying realities to bear in mind:

First, there’s an important difference between short-term and long-term disability claims. The former include conditions such as broken arms or wrists. They involve payouts over a limited period ...