LTD Benefit Person,
Thank you for sharing your experience from working within an insurance company that sells LTD. It is interesting that you never mentioned ERISA, which is the Federal laws governing LTD. What ERISA allows insurance companies to behave in a capricious manner mainly because when there is malfeasance by the insurance company the complainant is unable to sue for punitive damages.
However, if the case falls under the purview of the state punitive claims can be awarded. I personally know of one LTD claimant who was denied his claim after a couple of years. The insurance company claimed it fell under ERISA because an office worker mistakenly paid his monthly LTD insurance fee by a company check.
Being aware of how many LTD insurance companies will deny high wage earners after a year or two this gentleman cancelled the payment and reissued the payment from his personal checking account. That one lone error would have been enough to prevent him from filling in his state’s Superior Court.
The outcome was that the LTD insurance company was slapped silly with punitive damages.
I’ll agree with you that backdated SSDI payments should be used to reimburse the insurance company. It’s like how auto insurance used and medical insurance would cover the same claim giving the claimant a double payment.
When it comes to profit/loss, I’ll beg to differ. There are a lot of ways to make it look like there is little profit or even a loss. Movie studios wrote the book on it and the insurance companies appear to have read it. Insurance companies reward their CEOs with yearly benefits that exceed what the average worker will earn in a lifetime. Do you really believe that these captains of insurance are going to allow a loss?
Finally, you don’t really understand what a LTD claimant experiences. Sure, there are some bad apples in every barrel, but it is not as rampant as the insurance companies want you to believe. The fact is that most people hate being disabled. Given a choice they would LOVE to return to work. Talk with someone who has followed the rules their entire life and then suddenly finds themselves disabled and you’ll find someone who can’t understand why the insurance company is treating them like a thief. It’s a walloping blow to be in physical pain, then have some faceless LTD claims adjuster suggest you’re faking it and should get back to work.