Brigette Honaker  |  May 6, 2020

Category: Insurance

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long term disability insurance application

Someone hurt in a way that impacts their ability to work will likely pursue Long-Term Disability (LTD) benefits, if applicable. If that disability claim is denied, however, such as when someone submits to Northwestern Mutual Disability, the applicant should be aware of their avenues to appeal.

What is Northwestern Mutual Disability Insurance?

Northwestern Mutual is a large insurance and wealth management company which provides a variety of services including disability insurance. The company claims to be number one for disability income insurance with a 96 percent client retention rate.

According to the Northwestern Mutual disability insurance website, a short or long term disability insurance policy covers a portion of a policyholder’s income in the event of a disabling injury or illness. Benefits from these plans can help cover between 50 and 60 percent of a policyholder’s income or various expenses resulting from a disability such as the cost of household services for stay at home parents.

Often times, employers provide benefits to their employees through group plans. These plans are associated with better rates and benefits than what an individual could acquire. Northwestern Mutual advertises it services as able to “supplement” an employer plan and “close the gap between what’s covered by your employer’s group policy and what you need to maintain your lifestyle.”

Northwestern Mutual disability insurance comes in the form of both long term and short term policies. As the name implies, short term disability insurance only provides benefits to beneficiaries for a short period of time. In contrast, long term disability insurance provides benefits for years opposed to months.

Each of the policy types have their strengths and may be vital when a policyholder finds themselves disabled by an injury or illness. However, some consumers have complained that their disability insurance claims have been denied despite meeting the requirements for benefits.

There are many reasons why Northwestern Mutual Disability claims or long-term disability claims from any employer-provided benefits package may get denied—many of which are unfair.

One underlying reason for claims denial is that the administrators which review claims typically work for the insurance company itself. A company will always look to make a profit, and some whose claims have been denied say that this causes an inherent conflict of interest that favors the organization.

What is ERISA?

Although some consumers claim that insurance companies wrongfully deny their disability claims, there are standards by which companies must adhere. These laws and regulations aim to protect policyholders from being taken advantage of by insurance companies. One such law is the Employee Retirement Income Security Act (ERISA).

Policies provided by an employer must operate under the rules established by ERISA. Enacted in 1974, it codified a set of standards to which private industry-based benefit plans and their managers must meet. ERISA was put into place to protect benefit funds from abusive mismanagement, ensuring the employee would gain access to provided benefits even if the company goes bankrupt.

The law requires plan sponsors to act in the best interests of the group of insured and their beneficiaries when managing a benefit fund. It also requires them to fully publish an outline of information concerning the plan and any process for appealing a Northwestern Mutual Disability claims denial or that of another insuring company. While access to this information is increasingly available online to registered employees partaking in a benefit plan, human resources departments frequently provide print copies upon request.

What Happens When Northwestern Mutual Disability Insurance is Denied?

Every Long Term Disability (LTD) policy allows for at least one level of administrative appeals, although some companies allow for two levels of appeal. Is it through the appeals process that most people who submit LTD claims eventually get coverage.

Appeals are evaluated by different claim units than the original reviewers, so someone who first got denied but had a legitimate claim could get coverage through appeals. Additionally, a claim may include additional information during the appeals process either at the request of the insurer or by policyholder choice in a move to bolster their claims. Regardless, an appeal can be a great way to ensure that a consumer in need gets the benefits they are owed.

What if the Appeal for Benefits is Denied?

No matter what process your insurance company, like Northwestern Mutual Disability, follows when reviewing appeals, an applicant must first exhaust the full administrative appeals process before filing a lawsuit against the company if the employer company was providing group disability coverage.

What’s My First Step if My Application was Denied?

If you recently received a denial letter from any insurance company, such as Northwestern Mutual Disability or Unum, this letter should be reviewed in full. The denial letter explains why the long term disability insurance claim did not meet the grounds for approval, and this information is extremely important for proceeding with an appeal.

These denials can be confusing to understand, which is why having an LTD disability lawyer with you can help with the full process. Additional documentation can assist in presenting the full case to the reviewers in the appeals process, but an applicant who was denied can also ask for a copy of their claim file from the company.

The denial letter also details the deadlines for responding with a formal appeal. All paperwork should be submitted on time.

What Other Legal Issues Should a Denied Applicant Consider?

bad faith insurance denialMost employer-offered LTD policies for employees fall under the umbrella of ERISA coverage. This means that after the applicant goes through all the administrative appeals process and is still denied, the record on the insurance file is closed.

If proceeding with a federal case under ERISA, the judge can only consider the evidence already submitted in the file at that point in time. This is why it’s key for the denied applicant to submit as much evidence as possible so that it’s in the claim file at the time of any lawsuit.

How Important is the Policy’s Definition of Disability?

In a May 2019 article in the National Law Review, a lawsuit was discussed in which an employee of Apple, Inc. had sued the Life Insurance Company of North America after they denied his claim for long-term disability benefits. At the heart of the lawsuit was the accepted definition of disability relative to the length of benefit payout. This is where it becomes important to read and understand the parameters of your individual plan.

Under the plaintiff’s long-term disability policy, he could be considered disabled for the first 12 months of illness or injury preventing him from performing the duties of his regular occupation or equivalent. After that first year, the plan stipulated that he could only be considered disabled if he could not perform the duties of any job for which he could be trained based upon education and experience. The definition of disability reigns supreme in disability benefit denials.

If a policyholder isn’t aware of their policy’s definition of disability or if they fail to meet these requirements, they may be quickly denied while seeking disability benefits. Having a clear understanding of a policy’s definition of disability, or utilizing the help of a knowledgeable attorney, could be a big step towards a successful appeal.

How Vital are Medical Records in Securing Long-Term Benefits?

One of the biggest problems with Northwestern Mutual Disability Claims or other long-term disability claims getting rejected is a failure on the part of the insured to seek consistent and regular medical treatment. A record of such treatment is objective proof of the health problem at hand. If regular visits aren’t being made to a general practitioner or specialist and objective diagnostic tests being ordered, there is little to substantiate the inability to work.

That said, getting the medical records into the hands of the insurance company may prove to be more challenging than anticipated. Holes in the record may then lead to claim rejection. Unfortunately, the burden of proof lies with the insured and the best method for dealing with this is asking for a list of records received from the claims adjuster and then pushing them to seek missing pieces of the puzzle.

If you have had your long-term disability claim rejected, it is important you follow the appeal process with deadlines as posted in your plan outline. Using a qualified attorney to help with this process could be vital to your success.

Do I Need a Lawyer to Appeal a Denied Northwestern Mutual Insurance Disability Claim?

As an injured or ill person, you might need your LTD benefits to pay your bills and stay focused on your care. A lawyer can take this pressure off of you. An attorney can also assist in bad faith insurance cases.

Reading the language of a Northwestern Mutual disability or Unum LTD policy can be extremely confusing even for the applicant who knows the basics about their long term disability program. Insurance companies will rely on the applicant’s lack of awareness about the process to work in their favor. Meeting deadlines and submitting all the right information is critical, and an attorney can help with that process.

An attorney who has worked in this field for some time has knowledge about the appeals procedure and can help ensure that you meet every deadline. Although a lawyer is not required for these appeals, their legal expertise could make the process less challenging and easier on their clients.

Additionally, in the case that an appeal is unsuccessful, policyholders who have exhausted all administrative options may have the option to file a civil complaint against their insurance claims. This process could be similarly streamlined and simplified by the assistance of an attorney.

Get Help With Your Long Term Disability Insurance Appeal

If an insurance company denied your long-term disability insurance claim within the past 180 days, a knowledgeable insurance attorney can help you appeal.

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