Critical Illness Insurance Claims

Being diagnosed with a Critical Illness such as cancer or renal disease is something we all fear. Likewise, a Chronic Illness diagnosis can alter a person’s life. A Critical Illness or Chronic Illness diagnosis comes after a doctor has tested their patient and had them under observation to confirm their condition. Often these diagnosis are made by highly trained specialists. How then can a life insurer disagree with the severity of the diagnosis? How can they deny a Chronic Illness or a Critical Illness claim?

They can and they do.

We prepare and file Critical Illness claims for our clients so they get maximum payouts.

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LIFE INSURANCE LIVING BENEFITS

Could anything be more disappointing from an insurance company than for them to challenge a critical illness diagnosis and refuse to pay a claim? Being diagnosed with a critical illness shocks most people because it puts them face to face with their mortality. The life insurance industry offers add-on benefits to their policies known as Living Benefits. Living Benefits include both Chronic Illness coverage and Critical Illness coverage. These Living Benefits are supposed to payout a percentage of a life insurance policy while the insured is alive. For example, a life insurance policy with a $1 million death benefit may payout $500,000 to someone recently diagnosed with cancer.

These Living Benefits seem straight-forward. Most often the policy owner doesn’t even pay for them to be included in their policy. They’re marketed as freebies. But the truth is that making a claim for a Chronic Illness or a Critical Illness may trigger an intense audit of the insured’s medical history and the entire policy, and the result may be that not only will the insurer deny the Living Benefit claim they’ll also cancel the insurance policy altogether.

What is a Chronic or Critical Illness?

Each insurer answers this question differently. It’s imperative, if this benefit is important to the policy owner, that they read the definitions and conditions for Chronic and Critical Illness according to the policy they’re considering.

Generally, a Chronic Illness is a condition that persists and creates a result in the person which makes it difficult or impossible to conduct their life as usual. Often this type of condition is measured by an industry-accepted Activity of Daily Living. These are a person’s ability to do things like bathe themselves, walk without assistance and use the bathroom alone.

One example of how a Chronic Illness differs from one carrier to another is how one insurer requires a person’s Chronic Illness to be permanent while another carrier does not. It may not seem like a big deal until you consider that it opens the door for the “must be permanent” carrier to challenge the Chronic Illness claim. If they find evidence that someone else recovered from the same illness you have, they can deny your claim because your illness will not be considered permanent. But in fact, only time will tell if a person’s illness ends-up being permanent or not.

A Critical Illness is any number of ailments that are known to shorten a person’s natural life. These include medical events such as heart attack, stroke, coronary bypass, renal failure, paralysis, and Alzheimer’s disease. We demonstrate below how each insurer looks at these events and places restrictions or even exclusions to them.

Exclusions in Chronic and Critical Illness Policies

Where Chronic and Critical Illness claims get really difficult to collect on is in the details of what a person must go through in order to satisfy the insurer of their diagnosis. Let’s look at a few examples:

Heart Attack – Diagnosis must be supported by 3 or more of the following indicators: typical chest pain suggestive of heart attack; new EKG changes indicative of myocardial infarction; diagnostic increase of specific cardiac markers typical for heart attack; or, confirmatory imaging studies.

What if the insured’s diagnostic markers hold steady? Does that mean they didn’t have a heart attack? No, it simply means the insurer now has a challenge to paying the claim. Likewise, what if the insured only has two of the required 3 markers?

Stroke – Diagnosis must be based on documented neurological deficits and confirmatory neuroimaging studies. Stroke does not include cerebral symptoms due to Transient lschemic Attack (TIA), Reversible neurological deficit, migraine, cerebral injury resulting from trauma or hypoxia, or vascular disease affecting the eye, optic nerve or vestibular functions.

A Stroke has many, many exceptions for an insurer to get out of paying what would seem to be an obvious claim.

Coronary Bypass Surgery – Angiographic evidence to support the necessity for this surgery will be required. This benefit does not include balloon angioplasty, laser embolectomy, atherectomy, stent placement, or other non-surgical procedures.

As most doctors will look for non-surgical alternatives first, again an insurer has many exceptions to paying such a claim. The reality though is that the insured has a significant and potentially lethal heart condition.

Another somewhat overlooked exclusion for an insurer to not pay a Critical Illness claim is when the insured has any surgical treatment outside of the US. Returning to any home-country outside of the US, including Canada, Europe and Mexico, because that is where the person feels most comfortable excludes them from receiving a life insurance policy’s Living Benefits.

How Does the Claim Process Work for a Critical Illness Insurance Claim?

Once an insured has been diagnosed with a Chronic or Critical Illness they can file a claim on their life insurance policy. The insurance company will send the claim to a special division that handles these claims and they will open an investigation.

The investigators will seek medical records. They will have their own doctor review the insured’s medical records and give opinions about the policyholder’s medical condition. The insurer’s legal team will then apply the policy exclusions and conditions and make a final decision to pay or deny the claim.

The insured will have no part in any of this process and will not be consulted by the insurer.

If the insurer wanted to simply pay the claim they wouldn’t do an investigation and certainly not in such secrecy.

Can I Have My Own Claim Representative When I File a Critical Illness Claim?

More than any other form of life insurance claim, when a policy owner files a Critical Illness claim they should have their own representation. This is an independent firm who does their own assessment of the medical files, uses their own medical professional’s opinions and works directly with the insurer to get the policyholder’s claim approved.

Why Would My Insurer Deny My Chronic or Critical Illness Insurance Claim?

Even when someone has had a heart attack or a stroke or has been told by their doctor they have a cognitive deficit their life insurer can still deny their Living Benefit claim. We’ve shared just a few examples of how this can happen. And the reason it does happen is because insurers only want to pay claims they have no way of getting away from. But Living Benefit claims are more complex than other claims. With life insurance, as one example, the insured is either dead or alive. Therefore, a death claim is fairly straight-forward. But what constitutes a Chronic or Critical Illness according to a specific life insurer’s contract makes winning approval for such claims much more difficult. Then, consider that there are exclusions that have to be overcome, incorrect interpretations of medical files by examiners and challenges to the original application information including: finances, driving violations and psychological records. It becomes immediately apparent how easy it is for a Living Benefit claim to be denied.

The Center for Life Insurance Represents Policyholders with Chronic Illness and Critical Illness Claims. For help with your claim call us now.