An ideal way to protect against loss of income due to disability is to purchase private disability insurance. The insurance company pays a monthly pension to the insured person in the event of a benefit and thus compensates for loss of income. In some cases, however, the insurance company may not pay out and the insured person may not receive a pension. In this article, you can read about the possible causes of an insurance company's refusal to pay benefits and what options are available.
The main reason for a rejection of the requested benefit is a failure to achieve the required BU – degree. Frequently, fraud is also detected, which also leads to a denial of benefits. Source: Morgen& Tomorrow, 2018.
Definition: Occupational disability
What exactly is an occupational disability is defined in the insurance contract law. There, occupational disability is described as the inability to permanently perform all or part of the occupation last held as a result of illness, injury, or a decline in strength. It is important to note that at least 50% of the previously performed activity can no longer be performed. If the working capacity is less than 50% impaired, the insured person does not count as occupationally disabled. However, deviating contract agreements are also possible here, which stipulate an occupational disability already from a different percentage rate.
So, to be considered incapacitated, the illness must cause you to be unable to perform at least 50% of your usual activities. In addition, the occupational disability must be medically prognosticated over a certain period of time. In most cases, this is a six-month period.
Abstract Referral
If the contract is for disability insurance and contains a clause that addresses abstract referral, the insurance company can deny the agreed-upon benefit, even if a disability exists.
The abstract referral aims to refer the insured person to another occupation, which could be performed despite existing occupational disability. The insurance company argues that the workload and wages of the new occupation are similar to the old occupation and that the skills the employee possesses would fit well in the new occupation.
Thus, the benefit may be denied and the insured person is referred to another profession, which could be performed despite occupational disability. Here you can learn more about the abstract referral.
Answering the health questions
Another reason why disability insurance won't pay is if you answer the health questions incorrectly or incompletely. In the event of a claim, the insurance company checks all the insured person's details again. If there are discrepancies when the information is checked, the insurance company will refuse to pay the agreed benefits.
For this reason, the questions of the health examination should be filled out conscientiously and completely. Otherwise, in case of need, the insured persons are left without insurance and face financial difficulties.
Possibilities in case of denial of benefits
If the occupational disability insurance refuses to pay benefits even though the required degree of occupational disability has been reached and no false statements have been made, the insured person should hold on to his claim for benefits. First, the reasons for the denial of benefits should be looked at in detail to understand why the insurance company withholds the benefit. If these reasons are not convincing in your eyes, you should contact the insurance company and state your case. However, insurance companies are often very stubborn when it comes to contesting denied benefits.
It can be helpful to consult a lawyer in good time. The latter can assess whether the denial of benefits is justified and take over the talks with the insurance company. Another useful option is to seek expert advice from specialist lawyers or insurance advisors before submitting the claim for benefits to the insurer in order to better assess the situation.
Look carefully before signing the contract
The process of claiming denied benefits from your insurance company can be very lengthy and arduous. Therefore, it is best to examine a disability insurance policy as closely as possible in advance for pitfalls and anticipate potential problems in the event of a claim. Private individuals, however, do not always find all the clauses and conditions that could stand in the way of an uncomplicated process in the event of a claim.
That's why it's helpful to seek professional advice when purchasing disability insurance. We support you with our long experience free of charge and advise you until the conclusion of the contract.