Disability Insurance Articles

Fraud And What It Means For Your Disability Payment

2011-05-09

Disability fraud causes problems for both claimants and insurance companies. Insurance companies have put tight controls in place to protect themselves, but these security measures can translate into frustrating red tape for claimants who are not defrauding the system and need the financial assistance they have insured for themselves. However, claimants fare much worse in the public sector where 80 to 90 percent of Social Security disability claims are initially denied to ward off fraudulent claims. This measure has created a back log of Social Security appeals that in some states can take up to 18 months to be heard.

To avoid repeating the Social Security quagmire, a private disability insurance policy wards off fraudulent disability claims with tighter security measures that require specific documentation of a disability in order to receive payment. Documentation can include requests for medical evidence and a written evaluation by a doctor who works for the insurance company. The claimant must prove his or her condition and clearly establish severity. These steps can be frustrating from the claimant's perspective. Understanding responsibilities of submitting claim upfront when reviewing a disability insurance quote can reduce payment delays.

Even with careful documentation, certain disability claims trigger red flags. These include chronic conditions such as back pain and chronic fatigue syndrome.These are prevalent amid fraudulent claims. To prevent all claimants from paying the price of fraud, there are also disability claims that can be expedited for approval and do not require an additional examination by an insurance company doctor. These "automatic" approvals vary but generally include neurological conditions, malignancies, cardiovascular conditions such as stroke. The Social Security website offers a comprehensive list.

Another area of disability fraud that interferes with payments on real claims deals with identifying the longevity of the disability. A disability insurance policy may provide benefits for two years, but that does not mean a claimant is automatically entitled to receive payments for two years. Just as insurance doctors may be involved in establishing the validity of a claim, again, claimants may be routinely requested to make follow-up appointments with the doctor who is looking to assess a disability overtime. If the doctor recommends a claimant is fit for work, the insurance company will notify the claimant that coverage will end. The claimant has an opportunity to dispute medical opinion.

It is also fraudulent to receive disability insurance payments and continue to work on the side. For this reason, a disability insurance policy dictates strict guidelines about what kind of paid or volunteer work, if any, is acceptable under a disability claim.

Disability fraud complicates claim submissions, but the safeguards can work for everyone. Read these when reviewing a disability insurance quote.