Filing a long-term disability claim is a major undertaking.<\/p>\n
When an insurance company is making it as hard as possible to qualify for insurance benefits, this can make the process even more daunting. In extreme cases, it can dramatically affect your quality of life and even the amount of care you receive.<\/p>\n
One way an insurance company might try to avoid paying out claims is through a \u201cdiscretionary clause.\u201d This completely changes the game and the potential fairness of litigation. Fortunately, for a valid legal case, an experienced disability lawyer<\/a> can help you get what you deserve.<\/p>\n A discretionary clause<\/b> is a section of a contract that grants an insurance company “sole and absolution discretion” to interpret the terms of an insurance policy. In an insurance plan, a discretionary clause grants authority to the insurance company to determine eligibility for benefits in any short or long-term disability claim.<\/p>\n It is truly a scenario of \u201cthe fox watching over the henhouse.\u201d It\u2019s in the best interest of the insurance company to avoid paying out as long as possible or to delay in the hope that you eventually give up your claim. A discretionary clause allows the company to do just that.<\/p>\n The key language in a discretionary clause is \u201csole and absolute discretion.\u201d<\/strong> This seemingly simple term can have profound implications.<\/p>\n First, it allows the insurance company sole authority to interpret the insurance policy. Therefore, any term of the policy that is ambiguous, meaning it is subject to two or more \u201creasonable interpretations,\u201d must be interpreted in favor of the insurance company. This is true even if<\/em> common sense would dictate otherwise.<\/p>\n Second, let’s say your disability insurance policy was provided as an employee benefit and the policy is governed by ERISA\u2019s special judicial review procedures. In this case, the court is not allowed to overturn the insurance company’s denial of your claim unless it finds the insurer committed an \u201cabuse of discretion\u201d by acting in an \u201carbitrary and capricious<\/a>\u201d manner.<\/p>\n Because of the obvious imbalance of power and unfairness resulting from discretionary clauses, many states have simply banned them outright. Fortunately for disability insurance claimants in Washington<\/a> and Oregon, discretionary clauses have been banned in these states.<\/p>\n Both Washington and Oregon have had lawsuits that have upheld the bans and given the bans preeminence in disability insurance disputes. Even so, understanding how to go after the insurance company to get it to honor a valid claim still can be tricky. That’s why hiring a competent attorney is so important.<\/p>\n Roy Law Group won a landmark case proving that Principal Life Insurance Company\u2019s discretionary clause was invalid<\/a> for a claimant living in Washington state. Despite the fact the insurance policy was issued and delivered in Texas, where discretionary clauses were not banned, Washington State law took legal precedence.<\/p>\n Even though many states have banned discretionary clauses, many insurance companies will gamble and include a discretionary clause on most disability insurance policies. Why?<\/p>\n The short answer is the insurance company assumes no risk by including the clause, and it can help stave off legitimate claims.<\/p>\n If the clause is not applicable, the court will simply ignore it and not apply deference to the insurance company. However, sometimes the inquiry never goes that far. Sometimes claimants give up on their claims because they think they have little chance of winning, unaware the policy\u2019s discretionary clause is invalid and unenforceable.<\/p>\n Insurance companies deny legitimate claims all the time. <\/strong>They know most claimants have no idea what parts of their contracts are enforceable, or whether the law actually backs up their denials.<\/p>\n If the insurance company decides to deny a claim and then it wins in a court case, it gets to reduce the payments it owes the person suing the company. If it appears the company will lose a case, all it must do is honor the contract. Barring harm caused by the denial, it is off the hook legally.<\/p>\n Each point is a gamble with a degree of risk. In most cases, the insurance company considers the potential reward to be much better than the perceived risk. There is one instance, however, where the tables get turned very quickly: The claimant hires an attorney.<\/p>\n When the claimant hires an attorney<\/a>, the risk-and-reward formula the insurance company uses gets turned upside down. An attorney will know the law and how it is applied, how courts have regarded it, and how ERISA works. A competent ERISA attorney<\/a> is also trained in negotiation and can take care of the legal legwork that drives some claimants away.<\/p>\n If you are filing a disability claim<\/a>, you have a choice. Go it alone and hope the insurance company does the right thing. Or make it clear from the start that you mean business and fighting you will only cost the insurance company more money.<\/p>\n Hiring an attorney that specializes in disability law, ERISA, long-term disability benefits, and discretionary clauses is important if you want to have a chance against the insurance companies. If you are a disability filer, start the process of leveling the playing field and contact a lawyer who specializes in disability law today for a free consultation<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Filing a long-term disability claim is a major undertaking. When an insurance company is making it as hard as possible to qualify for insurance benefits, this can make the process even more daunting. In extreme cases, it can dramatically affect your quality of life and even the amount of care you receive. One way an read more<\/a><\/p>\n","protected":false},"author":4,"featured_media":8377,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[222],"tags":[261,260,12,6,255,265,270,256],"acf":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\n\n\nWhat is a discretionary clause?<\/h2>\n
The effect of sole and absolute discretion<\/h3>\n
Washington and Oregon: No discretionary clauses allowed<\/h2>\n
Why insurance companies gamble<\/h2>\n
Unenforceable discretionary clauses are all a part of the game<\/h3>\n
What you can do<\/h2>\n