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How to streamline the disability insurance claims process

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Filing an insurance claim can feel daunting.

From the time the claim is initiated to the time when benefits are paid, there seems to be a lot of paperwork and exchange of information. Filing a claim under an individual disability insurance (IDI) policy is both very much the same but also very different from any other kind of claim. 

For a client who is ill or injured, filing a disability claim may come during a challenging time in his or her life; they could be recovering from an injury, undergoing treatment for cancer or experiencing a psychiatric disorder. A client may be completely unable to work or only able to perform certain aspects of his or her job. Regardless, for a client who has IDI, filing a claim goes beyond simply getting a car repaired after an accident or belongings replaced after a break-in. IDI benefits ensure your client can maintain his or her way of life during recovery.

Related: Long-term care insurers pay more claims

Helping your clients through the process

As a producer, you’ve sold your clients an IDI policy through a certain carrier for a reason. While the coverage or pricing may have been part of what sealed the deal, the carrier’s claims philosophy and process should also have been considered.

Although there are a number of steps that need to be completed when filing an IDI claim, there are ways you can streamline the process. Here are some helpful tips to remember when one of your clients needs to file an IDI claim.

Related: 12 facts you should know about disability insurance

Initiating a claim

Your client elected IDI coverage for good reason, but probably never thought he or she would actually need to file a claim. So, if and when the time comes, a client’s first call may be to you.

As a producer, your service model probably includes taking care of a number of administrative aspects of servicing your plans. However, initiating a claim is one area where the client can take care of it themselves. As a producer, getting stuck in the middle, shuttling questions and information back and forth between the client and the carrier, inadvertently slows down the process and dilutes information needed for the evaluation of the claim. Having your client contact the carrier’s claim department directly helps optimize the process.

IDI benefits ensure your client can maintain his or her way of life during recovery. (Photo: iStock)IDI benefits ensure your client can maintain his or her way of life during recovery. (Photo: iStock)

You can help by making sure that your client is equipped with the following:

      • The phone number of the claims department. This is for initiating the claim and also any follow-up questions, discussions or conversations.
      • An understanding of the type of information that will be needed. For notice of claim, this generally includes:
              • When did the disability start?
              • What is the cause of disability?
              • Where does the client want correspondence/benefits sent?
              • Who is treating the client for their condition?
              • How has the condition impacted the client’s ability to do his or her job? 
      • An understanding of the forms that will be sent to the client for completion. At a minimum, these include the Insured’s Statement, an Attending Physician’s Statement and an authorization form.

Some clients may be sensitive about the type of information needed to complete the claims process. However, it’s not very different from the detailed information they provided when they applied for the policy in the first place. Providing a client with a preview of the information they’ll need to submit a claim can help make the process smoother.

Related: 2017 health, disability and LTCI planner

Pick up the phone when a claim needs to be filed

This may seem like straightforward advice; however, producers may reach out to the people they know, their contacts in underwriting or sales support, when initiating the process rather than contacting the claims department. Unfortunately, this approach slows down the process. 

When a disability happens

Every IDI policy has a waiting period; some are short (only 30 days), while others are much longer (365 or even 720 days). But that doesn’t mean that your client should wait that amount of time to inform the carrier about his or her disability. Regardless of the benefit waiting period, the carrier should be contacted right away so that they can gather information about the claim, provide the necessary forms and begin their evaluation. If all the information necessary for a determination is in the claim file, then once the waiting period is satisfied, benefits can usually be paid within 30 days.

Related: Preparing clients for a modified disability offer

Additionally, by contacting the claims department early on, if your client expects to be able to return to work before his or her waiting period is met, or if the policy excludes coverage for the condition being claimed, he or she can be made aware that benefits will likely not be payable. Finding this out before completing the claim forms, before an extended period of time has passed and before assuming benefits are payable, can make an adverse decision easier to accept.

Producers should avoid getting stuck in the middle of the client and the carrier as this can inadvertently slow down the claims process. (Photo: iStock)Producers should avoid getting stuck in the middle of the client and the carrier as this can inadvertently slow down the claims process. (Photo: iStock)

After a claim is initiated

IDI carriers want to help people ensure financial well-being during a disability. But, there are times when the decision has to be made that benefits are not payable. Understanding the limits of policy provisions, when benefits are or aren’t payable and what the definitions mean can go a long way toward ensuring that clients feel valued. 

Not only that, but when benefits are payable, there also may be regular check-ins that will occur during the benefit period. While other insurance claims can seem fairly straightforward — most of which have a one-time benefit payout — disability benefits can last for years. Because of that, the review process occurs not only at the beginning of the claim but on an ongoing basis throughout the entire life of the claim. If a policy provides benefits to age 67 and the insured is only 35 when a claim begins, the evaluation continues, in some form or fashion, for the next 32 years.

This ongoing evaluation can be as simple as requesting the completion of a claim form annually, or as detailed as providing monthly documentation of earnings, income, medical status and activities. Setting appropriate expectations regarding the importance of cooperating with the claims department as they conduct their ongoing review helps to avoid client discontent.

If you have questions, connect with the carrier’s claims staff

When you sell an IDI policy, you’re not just selling a policy, you’re selling the claims service and philosophy of the company. Look for a carrier who won’t mind getting on the phone with you, your general agent or even a client to talk through situations (even hypothetical ones) to help close a sale.

Don’t be afraid to reach out to a carrier’s claims department to learn about the claims handling philosophy and process, as well as how you can be most helpful to your client at the time of a claim. Good IDI carriers won’t be hesitant to make their claims team and process visible. You can feel good knowing that a carrier is willing to be transparent.

Setting yourself and your client up for success

The claims process and philosophy of a carrier is one of the most important aspects of your sale. To help set you and your client up for success, make sure you’re helping prepare him or her for what could happen as part of filing an IDI claim. In a moment in their life where there is potentially so much uncertainty, this approach will help smooth the process.

Sophia Horsman is senior director of Individual Disability Insurance (IDI) claims at Standard Insurance Company.

See also:

7 time-tested disability insurance sales tips

8 facts to know about disability insurance [infographic]

8 ways to avoid E&O claims

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