Case Study 3

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Disability Insurance plans are not all created the same and so it is vitally important that you know what the contract will or will not cover. Simply shopping around for the cheapest premium is the perfect way of guaranteeing trouble at the time of claim.


Group and Association LTD plans are good for employees with specific, well defined and limited occupational duties, Professionals, business owners and executives on the other hand who perform a multiple of complexity duties in the course of their workday need the flexibility and robust definitions that are contained in Individual disability insurance plans and a conversation with a qualified broker who specializes in this type of insurance should take priority. You also want someone working for you who can demonstrate after sales service and support, especially at the time of claim.


One such situation that I recently worked on comes to mind. Jim is a senior partner in a landscape architectural firm that specializes in designing and managing large institutional, government and parks projects. He and his firm had just been awarded a very major, multi-year contract that required not only his expertise in designing and laying out the project, but also for his critical eye to be onsite periodically to make certain that the project was being completed on time and as designed.


Shortly after starting work on the contract, Jim severely injured his knee in a sporting accident. It became so swollen and painful that it greatly restrict his mobility. The problems continued to get worse and Jim had to rely on pain killers to make his day tolerable. Physiotherapy and other treatments made little improvement and surgery eventually became his only option. For several months he was restricted to the ground floor of his home as he could not climb stairs and when he did go to the office, he was unable to perform his duties as quickly as he could before. The other architects in the office had to begin taking over some of his work duties which in turn led to their work being delayed.


Jim filed a claim on his disability insurance and it seemed to take forever to get a decision from the insurance company. They sent out field examiners to question him and observe firsthand what he was and was not able to do. They contacted his various doctors to get the reports on his limitations and his treatment. Jim, being a very honest and straight forward person held nothing back when they questioned him and being a business owner who is driven to do as much as he could despite his incapacity, answered the questions is such a way that it seemed he could do everything that was required of him. He said that he was not able to do actual site visits which consumed only about 5% of his time, but that the he could do everything else, albeit at a much reduced capacity.


The decision from the insurance company finally came back after a 3 or 4 month delay as a decline and when Jim called me I immediately went to his office and reviewed all that he had said in his interviews and what he thought his doctors would have reported. Listening to him I realized that the field examiner failed to accurately gather the complete story. He minimized the effect of several issues, the most being  Jim's inability to do site visits which if not performed would not only leave him with an unclear picture of the progress but more importantly would open him and his firm to liability issues. I reconstructed the history and the full details of Jim’s restrictions and met with the claims examiner to go over the details more closely and relate them back to the contractual provisions of Jim’s policy. These details reopened the claim and shortly thereafter it was approved and paid in full right from the date of the accident.


It is important to remember that Disability Insurance is a specialized area of insurance. Claims are paid based on satisfying the contractual definitions in the policy. Dealing with a broker who sells very few such policies is not in your best interest. Remember, expertise is a very valuable asset when you most need it.