Most life insurance policies being sold today include a set of benefits known as Living Benefits or Accelerated Benefits. These are for Terminal Illness, Critical Illness and Chronic Illness. There’s a huge lack of understanding about how these benefits work and how much they payout. Most people think that any diagnosis of cancer will qualify for a critical illness benefit payout. Likewise, most people think that any autoimmune illness will qualify for a chronic illness benefit payout. They won’t. It’s much more complicated. Living Benefit Claim Payout: Beware.
In order to get the maximum payout from a living benefit claim you must know how the evaluation process works and how the calculation of a payout amount is determined. Then be ready to fight. Don’t assume the insurer will act in your best interest.
Once you file for a critical illness or chronic illness claim you cannot re-file for the same illness if you don’t like the insurer’s claim offer (you believe it’s too low). That’s what your policy states. Therefore, it’s vitally important that you have a qualified, seasoned, expert representative working for you and your claim to maximize the benefit payment offer.
You Need Someone to Fight for Your Living Benefit Claim Payout
We’ve taken claims from denied to payable and from low offers to high offers. Retain us as your expert representative at no up-front cost before you file your claim. We know the ins-and-outs of accelerated benefit claims better than any firm and how to hold life insurance companies accountable for what they truly owe when a claim is filed.
The largest life insurers offering living benefits on their life insurance policies include:
PRUDENTIAL
MET LIFE – BRIGHTHOUSE FINANCIAL
TRANSAMERICA
NEW YORK LIFE – AARP
LINCOLN FINANCIAL
MINNESOTTA LIFE – SECURIAN
NORTHWESTERN LIFE
JOHN HANCOCK
MASS MUTUAL
STATE FARM
GUARDIAN
AAA LIFE
AMERICAN GENERAL – COREBRIDGE LIFE
ALLIANZ LIFE
How Does a Living Benefit Claim Work
First the insurer gathers medical records to determine if the person’s diagnosis qualifies for a benefit offer. They’ll request records from primary care, specialists and laboratories. The insurance company does not accept a doctor’s diagnosis as their basis to approve a claim. They apply their own criteria, using their own methods and their own doctors.
This isn’t a method designed to benefit the insured. It’s all designed to benefit the insurance company. You have to fight their methods in order to get a maximum benefit payment.
If they determine that a claim does qualify for a benefit they’ll then do their calculation for an offer. The benefit offer will include two options: the high offer and the mid-offer. The high offer is the most they’ll payout and the med-offer is half of the high offer. If the insured accepts the high offer they receive a lump sum of money and their life insurance is terminated. If they accept the mid-offer they receive half the money and they keep half of the life insurance contract in effect.
How Terminal Illness, Critical Illness and Chronic Illness Payouts are Calculated
When the life insurance policy is issued it includes an addendum for Living Benefits. The addendum has very confusing language which lays out what type of illnesses qualify for consideration of an accelerated benefit. It also discusses something usually termed “factors”. Factors are various things that go into the calculation of how much will be offered as a benefit – if the insured qualifies.
The factors are all in favor of the insurance company.
Understanding what the factors are and how they can impact a payout offer is part of the challenge to getting a maximum payout from a living benefit. Most of the terminology is specific to the inner workings of life insurance contracts. Things like “loss of premium”, “anticipated mortality” and “accelerated benefits interest rate” are typical factors. Most contracts have a list of 6 to 8 factors.
One of the biggest items that goes against the insured is the life expectancy calculation. The insurer doesn’t use generally acceptable tables for this. They use their own “assessment of life expectancy”. Things like family history, race, genetic predisposition are all well-known influences on disease and mortality. Insurers do not take any of these into account for their claim calculations unless they are demanded and forced to with scientific backing.
We do this hard work for our clients.
If you don’t understand the factors you won’t know if you’re getting a fair offer. We’re experts in Living Benefit calculations. We protect our clients from unreasonably low offers for chronic illness and critical illness claims.
Why Do Living Benefit Claims Get Denied
There are two hurdles to getting a living benefit claim paid. First, the life insurance policy must be out of the contestability period or must pass a new contestability review. This means that if the policy has been in good standing for 2 years the policy itself passes. If the policy has not been in good standing for 2 years the insurance company will investigate the medical history of the insured to determine if they gave any answers on their application that weren’t true.
If they find application answers that weren’t true the insurer will cancel the life insurance policy before the insured can make a living benefit claim. It’s called policy recission.
Let us tell you quite clearly, we win against policy recissions for our clients all the time.
If a policy does pass the evaluation and an accelerated benefit claim is allowed, the most common reason for denial of a claim is that the illness doesn’t qualify according to the insurer’s criteria. This can happen for many reasons depending on the policy. It can be that the insurer thinks an illness is not severe enough, or thinks an illness does not limit the daily living of the person, or the insurer thinks their likelihood of recovery is too high. It all comes back to the factors the life insurance company imposes when they evaluate a claim.
We’ve seen shocking cases of living benefit claims being denied because a cancer hasn’t spread enough, or loss of mobility isn’t limited enough, and so on. We’ll fight these ridiculous conclusions for our clients every day of the week and get them the money they’re entitled to.
Working with The Center for Life Insurance Disputes on Your Living Benefit Claim Payout
Our approach to living benefit claims is straight-forward. We don’t take any money up-front from our clients. We gather all the records and documents needed. We file the claim. We stay in constant contact with the examiner and address all issues that can limit a claim. We keep our client informed of all events. We fight any/all attempts by the insurer to deny or limit the claim payment. Upon acceptance of a claim offer the client is paid, then the client pays us. We are in sync with all of our clients – when they win, we win.
No firm knows more about living benefit claims and the processes of getting the maximum living benefits claim payouts. Contact us for more information about how we can help you.
Call: 888-428-4868
Resources for Dealing with a Chronic Illness or Critical Illness