Understanding Your LTD Policy: The Discretionary Clause and How It Affects Access to Your Benefits
Long-term disability insurance companies often insert discretionary clauses in their long-term disability policies, and these clauses aren’t always beneficial to both parties. By inserting these clauses, the insurance company reserves the right to determine whether you are disabled and whether they should pay your benefits, which creates an inherent conflict of interest. In order to protect your interests regarding long-term disability, make sure you know what to expect from your policy and find out how a discretionary clause could affect the benefits you’re entitled to.
How is a Discretionary Clause Harmful?
These clauses are harmful to the insured parties under the policy because they give the insurance company the benefit of a more lenient standard, under which a judge will review the insurance company’s denial. Under this more lenient standard, referred to as an abuse of discretion standard, a judge must determine that the insurance company abused its discretion by making an arbitrary and capricious decision in denying your claim. Alternatively, a judge can review your denial and determine whether the insurance company’s decision is fair.
Because of the unfair advantage discretionary clauses give to insurance companies, there is a nationwide trend toward banning these clauses in insurance policies. Furthermore, even if your policy allows the insurance company to decide whether you are entitled to your benefits, an experienced attorney can uncover the insurance carrier’s actions or claims practices and thus enable a judge to make a fair decision.
Let Our Firm Help You Obtain Long-Term Disability Benefits
If you have been denied long-term disability benefits, contact us today for help understanding your long-term disability policy so that our team can help you obtain the benefits you deserve! We care for our clients like they’re family, and we’re passionate about ensuring each of our clients understand their rights.
Ready to get started? Contact Crumley Roberts today to schedule a free consultation with our attorneys.