UNUM is one of the United States’ largest insurers and is notorious for denying long-term disability claims. At Bryant Legal Group, we fight for disabled claimants, helping them get the benefits they deserve. Over the years, we’ve handled many claims against UNUM, both involving employer-sponsored and private insurance policies.
In our UNUM series, our team of disability insurance lawyers will explore the many reasons behind the insurance company’s frequent denials. Here, you’ll learn how financial incentives can skew UNUM’s claim decisions.
As UNUM Grew, It Inherited Lots of Expensive, Private LTD Policies
For high-net-worth professionals, private long-term disability policies are often a smart investment. Many doctors, dentists, lawyers, and business owners purchase disability coverage that exceeds their employers’ plans.
For decades, insurance companies offered generous terms and large monthly benefit payments to entice this coveted market. However, as people started filing claims, the companies realized that these “Cadillac” disability insurance policies were incredibly unprofitable. They stopped selling these plans, but as long as policyholders paid their premiums, UNUM was stuck with the existing policies.
In 1997, UNUM merged with Provident Life. When the companies consolidated, UNUM Provident became one of the largest carriers of individual disability policies. Many of these plans were generously written Cadillac plans. UNUM has more of these “expensive” plans than almost any other insurance carrier. The company calls the remaining costly plans the “closed block.”
Historically, UNUM has tried to reduce the number of closed-block claims it pays, often by using illegal tactics. In 2004, the insurer agreed to pay $15 million in fines and reassess closed-block and other disability insurance claims that it had improperly denied. To many disability insurance advocates, these penalties seemed like a slap on the hand for outrageous behavior from a Fortune 500 insurance company.
Unfortunately, UNUM’s inclination for dirty tricks did not end with the 2004 settlement. The insurer quickly reverted to many of the same unsavory practices.
- Related Article: UNUM Disability Claims: 4 Things You Need to Know
UNUM Creates Conflicts of Interest by Tying Financial Incentives to Claims Decisions
For years, UNUM used to offer bonuses and financial incentives for claims representatives who denied people’s disability insurance benefits. We’ve heard stories about whiteboards in UNUM claims departments that showed UNUM’s stock price, wrongly implying that claims decisions impacted the company’s day-to-day financial wellbeing. Bonuses and compensation were often linked to how many cases employees could close in a month. In 2002, 60 Minutes reported that claims representatives who denied high-value claims often received cash incentives for their efforts.
Today, those whiteboards are long gone, and the incentive structure is more subtle. However, there are still serious problems with how UNUM pays the people who make the final decisions on long-term disability claims.
Insurance Companies Have a Fiduciary Duty to their Insureds
Under Illinois law, insurance companies have a duty to process people’s claims in good faith. UNUM and other insurers can’t deny a claim without a legitimate reason, intentionally delay payments of valid claims, or prioritize their financial interests over the facts. When company representatives violate this duty and wrongfully deny a private disability claim, victims are entitled to compensation.
When our lawyers investigate UNUM disability claims and denials, we often discover a pattern of errors. The company closes the investigation quickly, fails to obtain all of the policyholder’s medical records, and may even misinterpret its own policy language. A skilled long-term disability lawyer can fight these tactics, but too many people give up their right to insurance benefits without consulting with a law firm.
UNUM Ties Claims Directors’ Compensation to Profitability
To avoid conflicts of interest with their claims representatives, insurance companies should encourage neutrality and discourage institutional bias. However, UNUM does not distance claims adjusters and directors from concerns about the company’s financial health and profitability.
During depositions, our long-term disability lawyers have forced corporate executives to admit that UNUM ties bonuses for claims directors to the company’s financial performance and profitability. When combined with UNUM’s known disdain for “expensive” closed-block disability policies, these incentives actively discourage neutral decision-making from claims directors.
- Related Article: What Is Insurance Bad Faith?
What Should I Do if UNUM Denies My Long-Term Disability Claim?
Because UNUM is famous for its hard-nosed approach and willingness to deny LTD claims, it’s best to consult an experienced long-term disability insurance lawyer early on. That way, you’ll have a trained professional who can help you prepare your claim, build your evidence, and combat the claims adjuster’s tactics. Most reputable ERISA and disability insurance law firms offer free consultations, so you should not have to take on any financial risk.
However, if you’re not quite ready to schedule an appointment with us, here are a few things you can do to protect yourself during your disability claim:
- Before you apply, request a copy of your Plan Document and Summary Plan Description so you can review your long-term disability policy’s exact terms and conditions.
- When you apply for LTD benefits, make sure you list all your doctors and outline all your significant medical treatment.
- Keep copies of every letter, email, or communication that UNUM sends you.
- Make sure you meet the deadlines set out in your policy and in UNUM’s communications.
- Don’t agree to an in-home meeting with a UNUM representative. The representative may be performing surveillance and trying to damage your credibility.
As soon as you get a denial in the mail, you should contact an experienced disability lawyer. Appeals, both under Illinois and federal law, are complicated and require significant knowledge and expertise. It’s easy to make mistakes if you don’t have a professional on your side.
Bryant Legal Group: A Practical Approach to ERISA Litigation
When UNUM denies your private disability insurance claim, your lawyer should consider a bad faith claim. At Bryant Legal Group, we aggressively fight for our long-term disability clients, demanding the full compensation they’re owed under the law. We prioritize results over industry recognition, and we have recovered millions in compensation and insurance benefits for our clients.
To schedule your initial consultation with an experienced disability attorney from our team, call us at 312-667-2536 or use our online contact form.