Independent Life Brokers' Education Summit,
Seminar #21, May 16, 2000,
Anatomy of Disability Claims and Claimant's Attitudes,
By: Lawrence Geller

Lawrence Geller is one of the most prolific writers of individual and group disability in Canada. Working with professional partnerships, upper income individuals and other life brokers he is consistently one of the leading producers of disability coverage in Canada. This presentation will teach the broker who currently writes disability insurance business what he needs to know assist claimants to better understand the provisions of their disability policies, the reporting requirements for total and partial disability and for business disability coverages. It will also cover the creation of reasonable expectations for disability claimants and assisting to clarify disputed claims issues.

Anatomy of Disability Claims and Claimant's Attitudes

When agents meet with prospects we talk with them, at great length, in the hope that we can get them to understand the extent to which they are exposed to the risk of disability, and thus to the possible loss of not only their incomes, but also their business or professional practice. Although many can, in principal, understand the magnitude of these risks, few can appreciate what such a disability will mean to them.

Such was the case with one of our clients who found himself on claim. When we first met with him in the mid 1980's he had a very small individual disability policy ($1,500 / month for partial or total with a zero day Qualification Period)) plus a moderate amount of insurance with his association group ($1,700 / month for partial of total with a 30 day Q.P.) plus a moderate amount of insurance with his partnership's group long term disability ($5,000 / month for partial or total with a 180 day Q.P.). Neither he, nor anyone else with the partnership had done any co-ordination of their benefits. In fact, he didn't even know how much disability insurance he had.

So we did the work for him. Along the way we upgraded his partnership's L.T.D. plan (to $10,000 / month for partial or total with a zero day Q.P.) and integrated the L.T.D. with individual policies for all of the partners and employed professionals in the firm. We also insured most of them for their loans, their deferred income tax liabilities and reinsured their R.R.S.P. contributions against disability.

Early in 1994 he called to ask to meet with me. He had discovered that he was ill, and that it was just a question of time before he was unable to work. In the meanwhile, he was already losing a great deal of time to the torrent of tests needed to determine the nature of his problem. In addition, the strain was beginning to tell on him and he was losing time at work to the worry created by his medical condition. In fact, after talking for some time, he admitted that most days he just went to work, shut the door, and sat there thinking and worrying. He wanted to know if he was going to get benefits under his disability policies.

Fortunately he was. We had replaced his association plan with a great deal of individual coverage (increasing his DI to $10,000 / month for total or partial with a zero day Q.P.). This was in addition to a revamped, top of the line, group LTD programme that we had installed in his firm. We had protected him. And we were prepared to administer the claim to make sure that he was paid.

All of this took several months. And each week he and I would talk. We talked about the tests that he was having. We talked about the doctors that he was seeing and about their unwillingness to tell him what was really wrong with him. We talked about the impact that the strain that he was going through, and that the diagnosis/prognosis would have on his family. We talked about his relationship with his partners and his clients. We talked about his future and what he wanted for his wife and daughters.

And all of this was part of what we considered our job to be. We aren't psychologists, but we do know how to ask questions (see The Broad Concept by S. Sheldon Taerk and Talking to the Number Crunchers by Don Poole) and how to listen to our clients concerns and aspirations.

And we may have helped beyond his expectations. We certainly helped to make him far more comfortable about his finances. He knew that he was able to pay his bills, his taxes and his loans, even if he couldn't work. He knew that his R.R.S.P. would be self-completing. He knew that, when he died from this condition (and it was a very strong possibility), his family will be taken care of with life insurance that we had sold him and with the group life benefit that we had installed in his firm. And all of this made it easier for him to deal with his health problems.

He wasn't alone. We deal with each of our disabled clients in the same way. Value added is a big part of our business and we have incorporated that into our practice. Just selling the insurance isn't enough. A disabled client has enough to worry about without also having to worry about satisfying the requests of an insurance company for information and forms.

The spin-off is that we get more referrals from disabled clients than we get from anyone else.

Believing in insurance is a lot of the reason for this. Someone who buys from us obviously believes in insurance. Someone who has bought, and who has also been paid benefits under the contract, really believes in insurance. And they are willing to tell anyone who they talk to about the great work that we have done for them.

It is great to get a 'phone call, out of the blue, from someone who has been talking to a claimant and who wants to buy coverage from us. It reinforces our satisfaction with what we do.

That isn't why we spend so much of our time with claimants, although it is a part of our marketing startegy. We feel that the administration of claims is a big part of our "contract" as agents, with our clients. It is part of what they have paid us to do (via the commissions which we received for selling the insurance). It is part of the service which they require, and we provide it willingly. It would, of course, be nice if we didn't have to do it. We just aren't at that point in the real world.

The client in the case that I was discussing earlier died in the spring of 1996. His family are able to go on with their lives and he would be proud of what they have since accomplished. All of his daughters are university educated. One is still in school and the others have careers. His wife is able to keep the lifestyle that he had worked so hard for so long to build.

His partners still keep their coverages up to date. They have seen the benefit of having enough income to live in dignity when income is reduced during a disability. They have seen the benefit of not having to live off capital. They have seen the benefit of having sufficient life insurance to meet the needs of the survivors.

So get involved with your clients. Make sure that they understand that, as the great Ben Feldman said, insurance is a miracle of pen and ink, creating money when you need it most. Don't let your clients deal with this themselves.

Help them to get claims paid. In return they will provide you with more referrals than they ever have before. You won't regret the extra effort. We certainly don't.

Clients who, due to a disability, become claimants seem to develop an almost predictable series of attitudes and expectations. They feel that, since they know that they are sick and disabled, they shouldn't have to prove it. They often feel that their word, and that of their attending physician, should be sufficient to trigger a claim. They resent having to get their doctor to repeatedly fill in APRs and having to provide them according to a timeline specified by the insurer. They hate being questioned by claims examiners about their condition, feeling that everything should be self explanatory. After all, they reason, these people claim to be disability experts. How can they not know what the claimant is going through? In addition, it is incomprehensible to most claimants that the claims adjudicator would ever second guess an attending physician. Again, they reason, the doctor is the one who is treating them, they must know best.

As we all know, it is not that simple.

Much of the time disability claims are straightforward. There is little that we, as agents, have to do but reassure the claimant and submit the claim forms to the insurer. On other occasions the claims are much more complicated and we also may have to debate the validity and amount of the claim with the insurer. We may have to, in fact, help to prove that the claimant is entitled to be paid under the contract. And each time that this happens we become a little more disappointed with the insurers and more disillusioned with disability insurance as a product to sell to our clients.

We know that claims control is important. We know that it is the only way to keep costs and thus future premiums down. We know that insurers have an obligation not to pay fraudulent claims. But often we feel that the claimant has been lost in the paperwork. So a lot of what we do is to remind the insurer that the claimant is a person who has been paying premiums for protection against loss. We then demonstrate the amount and nature of the loss, and we pray that the insurer will understand. Most of the time they do.

Another claim comes to mind. This individual was one of my earlier clients. She realized the need for life and disability insurance and encouraged her partners to maintain the best group package that they could obtain. Her argument was that it was cheaper to work with people who weren't worried about whether they could get appropriate treatment than those who were worried about money.

Within just a few years her firm had used the group benefits and individual disability benefits on many occasions and had some fairly major claims. Each time this lady made the argument that without the plan the firm member would not have had peace of mind and there would have been more problems. Clients would have been unhappy. Other members of the firm would have wondered how they would be treated. There would be poorer morale.

Eventually the unthinkable happened and this lady developed cancer. She had all of the appropriate treatments and was recovering when the cancer came back with a vengeance.

The insurer let the ball slip and wrote to her saying that her claim was over. Needless to say that it wasn't.

The reason that I am telling you about this is twofold.

1. I had to argue with the insurer to convince them that she had not recovered. They had closed the file, and that was it.

2. when the supervisor looked at the file the claim was reinstated without hesitation.

When they letter terminating the claim came in my client was due in the hospital for surgery the following day. She went ballistic. If she had been a different type of person I suspect that she would have gone postal - she was that mad! She had been prudent. She had prepared herself, her family and her firm for the worst, at least financially. She felt betrayed. She called me and I conferenced in the claim adjudicator. Let's just say that they didn't get along.

We then got the supervisor on the line, and she agreed to look at the file. My client wasn't happy about that. She didn't want to wait for a day, or two, or three. She was going into the hospital the next day.

She knew that she would be OK, but anyone who is going in for surgery isn't sure deep down. What if something goes wrong? What if they can't deal with things later? They have to be done today.

Lawyers will tell you about wills that have to be changed the day before people go on holiday. Heck, most of you have probably had calls from clients who were about to go away, just checking to see if there insurance was in order.

She wrote a letter to the president of the company. By the end of the day the supervisor had called me and I had called my client. The claim was active again.

We aren't talking about what some insurers call an entitlement philosophy here. We are talking about payment provisions under a disability insurance contract. When a claimant meets the definition of disability, and has incurred a loss, benefits become payable. This really has to do with what at least one Canadian Court called a peace of mind issue. They agreed with my client, years after she had said it, without even knowing her. Boy, is she good!

Admittedly some insurers are easier to deal with on claims than others, but, in fact, most claims adjudicators are well intentioned, and they will authorize the payment of benefits once they understand why they have to based on evidence provided in support of the claim and on the contract wordings. The ones who are easy to deal with are willing to go looking for evidence to confirm a claim, when they believe that it exists.

To finish the story, the President of the company dropped the ball too. He didn't apologize. He tried to explain away the problem, pointing out that the supervisor had dealt with the situation the same day. The president of that company doesn't understand why people buy insurance. He isn't there any more.

My client is still a strong advocate of insurance. She is a very strong advocate of having a professional insurance agent. The company has continued to treat her claim appropriately since that time.

Over the past four years she has returned to work for periods of three of four months at a time, earning as much as she can, and reducing the liability of the insurer each time that she does. She hasn't recovered and has had several other problems. She will not give up - ever. She doesn't want to collect insurance benefits. She does everything that she can to work as much as she can and she has managed to keep almost all of her clients, with a lot of help from her partners.

She is typical of many if not most of the claimants who I deal with. If they are allowed to work they will, often far harder than their doctors may advise. If they can't work, well, isn't that why they bought the insurance?

Over the course of the past few years a number of agents contacted us to discuss the merits of various disability insurance policies. Each wanted to know what we looked for in a disability contract. To each our response was much the same. We look for a contract which will pay our clients a benefit in the event that their ability to work is interrupted or reduced by a disability, whether physical or emotional, no matter what the cause.

Much has been written in the past several years about the evaluation of disability contracts. More and more, insurers are aware that, in order to be competitive in the marketplace, contracts must cover partial and progressive disabilities without the precondition of total disability. This includes a need to recognize that many disabilities are intermittent and that, even during the elimination period, contracts must continue to accumulate days of disability for these illnesses.

Some group and association L.T.D. contracts are now superficially similar to the best individual disability policies. Many L.T.D. contracts allow for the accumulation of some non-consecutive days of disability. Partial disabilities are, in many cases, covered. Progressive disabilities seem to be included in the definition of disability. Yet the policies are often, in reality, much more restrictive than most individual D.I. contracts. They often limit the types of disability for which days may be accumulated to only the most severe. Equally they often restrict the number of days that an insured individual may return to work during the elimination period.

Offsets in these L.T.D. contracts are often extensive and may now may include benefits from individual policies as well as from other group or association plans, income earned in any occupation and income continuation plans, the activation of retirement and pension income (to which the employer has contributed), payments from governmental plans, etc.. Each of these limits the payments required from the group insurer and thus the amount actually received by the client. If a client pays for a benefit, that is the amount which they feel that they should receive. And they become frustrated when they receive far less because of these offsets.

In the past few years we have been seeing individual disability policies that contain these same premium provisions and benefit restrictions. In some cases these policies are being marketed without disclosure that better and more comprehensive policy forms are available. When an agent is involved in the transaction a policyholder may have some recourse against the agent. But when the sale is via an 800 number, or over the Internet, or through an association - does the purchaser have that protection? Who will they turn to for help?

There are several reasons that these products have been developed and sold.

Some insurers argue that they cannot adequately calculate the premiums necessary for non cancellable own occupation, residual policies. They argue that society is changing, that being disabled is no longer a stigma and that many claimants may be trying to retire using their disability coverage as a financial bridge. They are concerned about the increasing prevalence of mental and nervous claims. They are concerned that as baby boomers age they will have new problems and will find conditions that they claim are disabling. They feel that the market will not bear the premium necessary to support a guaranteed product line with the rich benefits that we have sold in the past. They are testing the waters by going direct to prospective clients with disability light - the new improved cheaper version with no agent who will call. (sorry, I couldn't resist)

It is my feeling that they don't get it. They don't understand why people buy disability insurance or how much they will pay for real peace of mind. Clients routinely pay 2% to protect their jewellery, or their car, or their house. They pay for what they think is of value to them. Everyone makes that decision for themselves.

As long as they know that there is a decision to be made. As long as they know that they have a choice. As long as they are willing to deal with the issue.

I have been selling insurance for well over 20 years. It has not been my experience that people tend to wake up one morning and say to themselves - Gee, I'd better get some disability insurance today. Someone has to suggest it to them, or they have to know someone who has been disabled and who has been saved financially by having the coverage.

Price is not the issue here, benefit payment is. Insurers must, when developing policy contracts, properly determine the premiums required to assure that claims can be paid, without financial loss to the company. They must also factor in the cost of education in policyholder service for their clerical force. When we deal with these clerks we often become frustrated. When clients deal with them they become annoyed and distressed, as though they didn't have enough problems dealing with their disability.

If cheap was the most important thing, then we wouldn't see anything but the bottom of the car manufacturers lines. We wouldn't see wool sweaters or socks - isn't polyester cheaper?

Everyone would live in apartments.

No-one would have their own doctor - they would go to a walk in clinic and wait.

There would be no good hotels or restaurants - just MacDonalds and Wendys.

Somebody must be buying value. I believe that everyone buys the best value that they can afford.

First comes shelter. Then comes food. Then comes security. Then comes clothing. Then comes everything else.

Insurance is security. It is high on most people's lists. Particularly when they have a claim.

For years we, as agents, have worked very hard to establish our credibility and that of the products which we sell. Now insurers may, in the pursuit of profitability, and after well more than a decade of intense price competition which they themselves generated, be eroding the quality of the new products that they sell and, in some cases, reviewing their policyholders' rights to claim benefits under existing policies, and annoying the public in the process.

I am against the sale of any products for which insurers fail to make full disclosure at the time of sale. Have you read the promotional literature for some of these policies? I have spent many years trying to understand disability policies and I can't determine what is covered under any contract without reading the policies several times. How can a client be expected to understand what they are buying from a brief, often less than 500 word, marketing brochure with an application for coverage attached?

Insurers often seem to feel that the worst that can happen is for the client to sue (if they can afford to after they are disabled) and maybe, eventually, after years, maybe win the benefits which they were entitled to receive based upon the representations of the insurer at the point of sale. Insurers, like many major corporations, see litigation as a cost of doing business. Claimants don't see it that way.

And that isn't what most of our clients want from their coverage. They are willing to pay the premiums charged. They don't set the premiums, the insurer does. They can't understand why they should have to sue.

Before going any further I must note that disability is entirely a creature of contract and the ultimate arbiter of contracts is the courts. I have been reminded of this several times by insurers and remind you all of it now. Sometimes law suits are the only way to find out what contracts mean. It is a sad state of affairs, but true.

In order to be eligible to receive disability benefits a claimant must first satisfy the definition of disability and benefit payment provisions in the insuring policy's wordings. These definitions range from the very liberal true own occupation residual disability wording, to the very restrictive unable to perform duties of a gainful occupation wording. Many claimants become confused by this, and their confusion is compounded by the fact that their doctor may not have any idea of what their policy requires before benefits are payable or of how disability is defined.

Imagine going to a doctor who tells you that you have cancer. The doctor tells you that you will be off work for two months, first for surgery, and then for chemotherapy. When this horror story is over and two months have passed, you still feel weak. Your doctor tells you to take it easy and that you aren't ready to return to work on even a part time basis. The question is, are you disabled under the definition of disability in your policy, and will you receive benefits?

The answer is in the contract.

Big Bob Gould, of what used to be Paul Revere used to say that the ultimate test of a disability policy was determined by three things:

1. it pays benefits without unwarranted delay;
2. it pays the full benefit amount purchased;
3. it pays for the full duration of the disability, or for the contracted period.

These tests remain the cornerstone of our evaluation of various forms of disability coverage. If we are comparing policy forms with each other the test becomes:

1. which pays first;
2. which pays the most;
3. which pays the longest.

To perform this analysis we have to be able to determine, to the best of our ability, the various provisions of each policy form that we see. This requires an understanding of the way that disability policies work and of the meaning of different definitions and payment provisions.

The payment of benefits under a disability income protection policy requires:

1. that insurance coverage was in force at the time of disability;
2. satisfaction on the part of the insurer that the coverage had not been fraudulently applied for;
3. that the cause of death was not ineligible (nuclear holocaust, etc.) or excluded;
4. the satisfaction of the definition of eligible disability;
5. the completion of a benefit waiting period; and
6. the subsequent continuation of an eligible disability for a specified period.

It is often convenient to think of disabilities as being in one of four categories:

1. total disability that is probably permanent;
2. total disability that is of limited duration;
3. partial or residual disability that is probably long-term; and
4. partial disability that is short-term;

as both the expectations of the client and the insurer may be different for each of these types of disabilities.

For total disability, that is for a condition from which the claimant has not recovered sufficiently to be able to return to meaningful work, a claimant generally expects that their insurer will honour the claim, once they receive the attending physician's report and copies of diagnostic tests.

As I said a minute ago though, it is also necessary that the insurer is satisfied that the claimant, due to a medical condition, meets the definition of eligible disability. In order to get a feeling for what this means, it is often useful to look at some of the more unusual claims, and at how Canadian courts have interpreted policy wordings defining total disability in those cases.

In Butler v. Blaylock the Supreme Court of British Columbia, in their 1981 decision, wrote:

"...there must be evidence of a "convincing" nature to overcome the improbability that pain will continue, in the absence of objective symptoms, well beyond the normal recovery period, but the plaintiff's own evidence, if consistent with the surrounding circumstances, may nevertheless suffice for the purpose."

The test of total disability was particularly clearly defined, for own occupation policies, by the Supreme Court of Canada in their 1983 decision in Paul Revere Life Insurance Company v. Sucharov when they wrote:

"The test of total disability is satisfied when the circumstances are such that a reasonable man would recognize that he should not engage in certain activity even though he literally is not physically unable to do so. In other words, total disability does not mean absolute physical inability to transact any kind of business pertaining to one's own occupation, but rather that there is total disability if the insured's injuries are such that common care and prudence require him to desist from his business or occupation in order to effectuate a cure; hence, if the condition of the insured is such that in order to effectuate a cure or prolongation of life, common care and prudence will require that he cease all work, he is totally disabled within the meaning of health or accident insurance policies."

More recently, in a decision upheld by the British Columbia Court of Appeals in a Judgement rendered on September 9, 1999, Justice Fraser wrote:

"... the meaning of "sickness" in this disability policy includes the condition of a person who genuinely wants to continue in his or her employment but, because of a perception, based on symptoms, that something is wrong with his or her body, genuinely and reasonably feels unable to do so. This is a substantially subjective test and depends on the credibility of the claimant."

In rendering the Judgement for the Court of Appeal Justice Prowse wrote, in part:

"The purpose of a provision for proof of claim is to furnish the insurer with the particulars of the loss and all data necessary to determine its liability. ... If disability payments could only be triggered when a claimant was able to pinpoint the precise cause of disability, then situations could arise in which a claimant was clearly disabled but not eligible for benefits because the exact nature of the sickness could not be determined. ..."

and in the same Judgement Justice Hall wrote, in part:

"A person's own perception of illness alone should not lead to a finding of disability based on illness. Some expert medical evidence was always necessary."

As we can see from these cases, decided over a 19 year period, the courts have decided how total disability should be defined, in many cases. They have decided that a doctor and patient should be given the benefit of the doubt when it comes to disability claims. A claimant should work as much as they, and their doctor, feel that they are able to. Unfortunately, although many claims are treated this way, some claimants would say that their claims have not been given this benefit of the doubt.

They might even say that they have been treated exactly as the courts say that they should not be. Even if they are not in the majority of claimants, they still represent a vocal minority and we hear from them, loudly.

Claimants who are totally disabled, and who are generally entirely dependent on their disability benefits for their incomes, can become very concerned by any delay in their receipt of their monthly benefits. They worry about money. They worry about their health. They worry about their future, and about their family. In fact, they may begin to worry about everything. To the claimant, the insurer has all of the power and not knowing what will happen makes them feel vulnerable.

Knowing what the claims process is, as it affects them, and how to deal with it may make their life somewhat easier to deal with.

As I have said, Canadian courts have found that a claimant must provide medical evidence of their disability. They must also provide financial proof of their loss of income due to the disability. Insurers, under their contracts, reserve the right to require that the appropriate reports and forms be submitted to them on a regular basis. Even if these are waived by the insurer, for a time, that does not mean that they do not have to be provided when they are again requested.

The claimant should expect to have to file reports with the insurer, generally monthly, although these can quickly become very annoying to a claimant who's condition is not improving. Many insurers require ongoing claims of this sort to be reported on every six months, rather than monthly, in recognition of their claimants sensitivities.

Many of the claims that I have seen that have gone off the rails have done so because the claimant, or their physician, failed to provide the required forms. Claims adjudicators need paper trails to substantiate their authorization of benefit payments. They just can't pay without the paperwork. Most of these claims can be cleared up just by getting the forms completed and into the adjudicator's hands along with copies of all tests.

In one case I was contacted by a claimant who was ready to sue her insurer. When she sent me her file I realized that there had been APSs outstanding for over 9 months. The adjudicator had made exceptions for three months, and then wrote telling the claimant what was needed. The claimant wasn't well and ignored the letter. Her specialists were busy and didn't get around to filling in the reports. They all expected the insurer to understand and keep paying. They all wrote indignant letters.

What a waste of time!

I called each of them, got the forms completed, sent them to the adjudicator (who is a very caring person I have discovered) and the claim was paid.

To give you an idea of how a claim can go well, at least in terms of paying benefits if not the ultimate outcome for the client, when this same client several months later had a severe relapse I call the adjudicator and told her. She offered to get the forms from the hospital and waive the APS for three months pending the outcome. She offered to make direct deposits to the client's account and asked that I get the client's work hours for the prior month so that she could deposit a benefit for the residual disability immediately.

There are lots of good guys working on claims.

Even permanently totally disabled claimants should be prepared for the insurer to request Independent Medical Examinations from time to time. Again, this is something that most insurance contracts call for, at the sole discretion of the insurer. The claimant has no say in this. The insurer is entitled to request an exam as long as they pay for it. While some insurers may deem these to be unnecessary for many conditions, it remains their right to obtain them, from time to time.

A claimant who is unprepared for this may become unnecessarily concerned by the request coming after months, or years, of a claim. It is more likely that this will happen if the insuring policy contains a change in the definition of disability after two or five years as the insurer is trying to determine whether the claimant meets the new definition.

Most insurers will put permanently totally disabled claimants on an automatic benefit payment for the same day each month. This gives the permanently totally disabled claimant a timetable for their benefit payments and will help to alleviate their concerns.

Partial and residual disability claims are often more difficult for both insurers and claimants. The insurer must accept that the loss of ability to work as much as during the pre-disability period is due to the medical condition being reported in order for benefits to be payable. Most contract wordings call for partial or residual benefits to be paid when a claimant is working with a reduction in income of 20% or greater and with a medical condition providing causality for the loss. Some go further in evaluating these claims. Some even seem to interpret their definition as meaning that no benefits are payable if an individual is capable of working in some capacity, and is not doing so. This is unusual, but it does occur.

Residual disability means that a claimant is working. The insurer may feel that the claimant could be working harder, or earning more, or earning more, and that is one of the times that a partial or residual claim may become a problem. Much has been written about the increase in malingering. Insurers see this as an attempt to defraud them. They may see this as part of the change in societal values that I referred to before. They may see it as their duty to fight this sort of activity. I have read and heard this many times.

Sometimes it may be true. In my experience though, virtually every claimant who I have met who was on partial disability would have preferred to have been healthy and pain free. Most push themselves hard. Most injure themselves more in the attempt to do their work. Some insurers provide assistance to these claimants. I am sorry to say that I seldom see t though. It is my sense that more help, and less suspicion would go a long way to helping these people to recover to their maximum potential.

In the meantime the system is the system, and the claimant has to show that they have suffered an insured loss in order for benefits to be paid.

For the claimant, a partial or residual disability claim means that every month a statement must be prepared for the insurer showing income earned in the month and eligible expenses for the month that reduce the net earned income. The insurer requires these to determine the amount of proportionate benefit that is payable in the month. Without them they have no way of assuring that they are paying the appropriate amount.

These statements must generally be provided to the insurer in addition to the regular monthly claimant's statement of disability and the Attending Physician's Report. While not overly difficult to prepare, in most cases, they can be time consuming and somewhat confusing to a claimant. There is, however, no option. All of these statements and reports must be submitted for the insurer to pay benefits for the month.

Insurers don't understand why a claimant would not submit all of the necessary paperwork regularly and on time. As far as they are concerned anyone who doesn't do it must not have a claim.

Claimants of course see it differently. The last thing on their mind is getting the paperwork done. They have to work, and work takes much more energy than before, even though they are doing less. They have to go to the doctor, and for treatment. They still have their other responsibilities. At the end of the day they are lucky not to fall asleep on the way home. They expect the insurer to understand.

I point out that the tax department requires tax returns, and the MOT requires driver's license renewal applications, and the bank requires mortgage documents. Insurers are just asking for a verifiable paper trail.

During the course of an extended period of residual disability a claimant may expect to be contacted with some regularity by the claims adjudicator and, occasionally be a field representative of the insurer. As I said, some insurers may offer rehabilitation or other services to claimants in an attempt to increase their ability to work and ideally to help them to get back to full time employment. While, in my estimation, these rehabilitative services can be of great benefit to claimants, and highly profitable for insurers, to my surprise I hear little about it occurring in the real world.

Claimants should be advised of their insurer's policy regarding ongoing contact by representatives of the insurer and for rehabilitation services so that they will be prepared when it occurs. Again, as I said earlier, most claimants like predictability, and knowing in advance what is likely to happen gives them some comfort.

Predictability is really the major thing that a claimant wants. There is much going on in their lives that is new and worrisome to them. Everything that is happening is new, much of it is confusing and unpredictable. Every visit to a doctor is of concern. In the back of their mind is always the thought that something else will go wrong. As I said earlier, health problems can be aggravated by financial worries. To a claimant, the reason that they bought disability insurance and kept paying the premiums for it was so that they wouldn't have to worry about money if their health failed, and their income fell.

Having to worry about whether the insurer will pay benefits is the last thing that they thought would happen. Without a doubt it is claims payment problems that cause claimants the greatest concern and agents the biggest headaches. When a claim problem happens the claimant inevitably turns the spotlight on the agent.

"You sold this stuff to me" they will say.

"You put me with this company".

"You told me that they would pay me if I was disabled".

"Well I am disabled, and they aren't paying".

This is the nightmare of every agent. We live by our reputations. We don't see litigation as a cost of doing business. We expect claims to be paid when people have medical conditions and find that or are told that they can't work.

Sometimes these problems are due to improperly completed claim forms. Sometime they are due to poor communication from the attending physician. Sometimes they are due to poor file preparation at the insurer, or misplaced documents or files. Sometimes they are due to a misunderstanding.

Sometimes these problems are absolutely incomprehensible to us. We look at the file, and at the medical reports, and at the claimant's statement, and at the other documentation provided, and we see a claim that should be eligible.

Sometimes we don't have all of the information. Sometimes we do, but there is a disagreement. The claims adjudicator just doesn't see the condition as disabling, no matter what the claimant, and every doctor who they have seen says or write.

In order to understand what is happening here we have to better understand how the claims process works. When we deal with the claims professionals at an insurer it may be helpful to try to understand what they are going through as they deal with your client's file.

When a claim is submitted the adjudicator has to deal with the, often complex, question of whether they believe claimant is "disabled" or not. The reality is that it is frequently a difficult decision for the adjudicator to make. Insurers don't just process transactions like a bank or mutual fund dealer, they make difficult, subjective decisions about whether they believe that the claimant does or doesn't meet the contractual provisions of the insuring contract, as they interpret them.

Sometimes a claim file takes many different employees of the insurer giving their input to help the adjudicator to understand, as best they can, all of the issues that go into a determination of the validity of the claim. These employees can include doctors, nurses, accountants, lawyers, rehabilitation specialists, and others and may also include outside consultants. The adjudicator may ask themselves:

1. does the claimant have a health condition and is it well documented?

2. does this condition impact on the claimant's ability of perform the "material and substantial" duties of their occupation?

3. what ARE the "material and substantial" duties of their occupation?

4. are there other business issues, legal issues, personal issues that are really behind a "soft" claim?

5. What are they?

6. How do I determine them?

7. What resources are available to me to review the claim?

8. Do I need an independent medical exam?

9. Do I need a forensic accountant to dig up any business problems that might be contributing to the claim?

10. Do I need a field representative to either visit the claimant or perhaps, perform surveillance for a "snapshot" of the claimant's actual daily activities.

11. Is the claim contestable? Has the application been properly completed?

12. Do I need to do an extensive investigation of the claimant's health history?

13. How best can I do this? Can I request records from OHIP or the claimant's doctors, can I get information from their group health carrier, or from pharmacy or hospital records?

I could go on describing the complexities of the process, but this will give you a flavour of what I believe the people at insurers who deal with these issues consider when they look at a claim.

Each time that an adjudicator deals with a file they have to make difficult decisions that can make or break a person's life. Different decisions by many different people with different life perspectives all dealing with a claim file makes this a very subjective determination in many cases. It's well known in the industry that you can have two highly skilled professionals totally disagree on whether someone is disabled or not. It's often a very difficult call.

The reality is that many people in claims departments in this industry struggle to make these decisions every day and they really do struggle to make the right decision most of the time.

Sometimes the decision is to deny a claim. Sometimes the decision is to pay. Sometimes the decision is a bad decision. Sometimes claims people let their emotions affect their decisions. This can cause claims to be paid that were deniable, and claims to be denied that were payable.

The fact that claims people themselves frequently differ on whether someone is disabled or not, allows us to understand how impossible it is to make denial decisions on claims that have been filed without a claimant being either disappointed, angry, or depressed.

Often when a claim is filed the insured believes that they are entitled to benefits. They've already made up their mind that they meet the policy definition of disability. They have already decided that they are disabled by their condition and their doctor agrees and has provided substantiation to the insurer. There is something wrong. They can't work or can't work as much.

From this you get a great deal of litigation. There is simply too much at stake here to let go and give up. After all, if members of claim departments can't always decide among themselves if someone is disabled or not and if the doctors disagree, then a judge might disagree with them too. The issue is highly subjective and thus open to different interpretations.

The looming problem for insurers is that their ability to hire and train people capable of performing this job is diminishing. The numbers of claims increases every year and as more experienced examiners retire and more new claims people are hired, the average level of experience among claims adjudicators declines steadily. In a business of thousands of decisions, this may lead to problems.

Some claims will be paid that shouldn't be, and claims will be denied than should have been paid. It's a tough business at the best of time.

We all know people who, with great pain and effort, continue to lead an active and productive life despite a major health condition. We all know that this can be done by some. Insurers, you can be sure, point this out to the members of their claim departments. It certainly is discussed, judging from the materials published, at industry conferences. With that as a backdrop, claims adjudicators are asked to make a decision that may involve millions of dollars to the company and the claimant. They feel that they need to keep a healthy bit of scepticism when evaluating claims. How they channel that scepticism and don't allow it to blur the truth will determine how effective their decisions will be.

We, as agents, come at claims from a different perspective. We sell insurance. We are expected to stand behind the products that we recommend and sell to our clients. Sometimes that means that we have to help our clients to understand a decision that they don't like. Sometimes it means that we have to try to help them to fight for their benefits. Neither is pleasant.

There are some tips that we can offer claimants that may make the claim less stressful for them:

1. I find it useful to suggest that claimants keep a supply of attending physician's statements with them when they go to their doctors' appointments and that they ask the doctor to complete a form at the end of an appointment. In this way the claimant always has a current APR to provide to the insurer in substantiation of their continuing claim;

2. I suggest that claimants keep a copy of the definition of disability in their contract and of their job description to show the doctor before they complete the forms. Many insurers require that the doctor make a statement about whether the claimant is disabled and it helps if the doctor understands the issues involved;

3. I suggest that claimants keep track of how they are feeling each day and what they are, and are not able to do at any time. I generally suggest that they keep a book for this purpose. I also suggest that they discuss their observations with their attending physician fairly regularly;

4. if a claimant is able to work, I generally suggest that they do so. It is easier to make the argument that they are residually disabled than that they are totally disabled in these cases;

5. I suggest that claimants keep note of every conversation that they have, whether with their doctor, with me or with the claims adjudicator or field representative. When possible there should be a third party present at interviews to give the claimant a second perspective on things;

6. if possible try to determine the date that the adjudicator requires forms to be submitted, and submit them on time, and not either early or late.