In Illinois, and throughout the country, the nature of the insurance business — whether in the health insurance, property insurance, business liability insurance, or disability insurance contexts — is to sign on policyholders while limiting the payout amount in a potentially covered event.  Considered from the perspective of the insurance company, success is being able to deny coverage for a legitimate claim, or perhaps delaying the processing of the claim to such an extent that the policyholder simply withdraws from any further attempt at recovering their rightful benefits.

State and federal law grants policyholders a number of rights, however, centered around the duty of good faith imposed on insurance companies.  Failure to adhere to this duty of good faith may entitle the policyholder (who has had their claim wrongfully denied, delayed, or otherwise mishandled) to sue and recover damages through bad faith litigation.

General Duty to Act in Good Faith

Under Illinois law, insurers have an implied duty of good faith towards their policyholders, which arises from the fundamentally asymmetric and inequitable nature of their relationship with the policyholder — after all, the relationship is based (at least in part) on the fact that policyholders trust the insurer to have specialized knowledge relating to insurance law and insurance agreements.  Policyholders therefore rely on the specialized knowledge of their insurer.  If the insurer uses this informational inequity to unreasonably disadvantage of their policyholder, then there may be a bad faith conflict.

In Illinois, the courts have found that there is no “common law” basis for a bad faith action against the insurer.  Instead, bad faith actions are elaborated upon by section 155 of the Insurance Code, which establishes the penalties for bad faith and defines the type of conduct that qualifies as a bad faith violation.  Such conduct includes:

• Knowing misrepresentations to the policyholder
• Failure to maintain regular communication with the policyholder with regard to the processing of an insurance claim
• Failure to payout the benefits that are due to the policyholder
• Knowingly denying a reasonable claim, such that the policyholder is forced to litigate in order to secure their rightful benefits
• Failure to conduct a proper investigation of the facts
• Failure to adopt reasonable investigation standards
• Attempting to settle a claim for less than it is reasonably worth
• Delaying the processing of the claim
• And more

It’s worth noting that section 155 penalties — though significant — are less than the punitive damages that might be available were you to bring a separate tort claim against the insurance company, such as fraud.  If the facts point to independent tort liability (i.e., fraud, intentional infliction of emotional distress, etc.), then your attorney may be able to secure additional damages on your behalf.  Generally speaking, however, the conduct of the insurer would have to be particularly egregious to justify such claims.

In any case, courts have found that problematic insurer conduct — by itself — may not necessarily give rise to a bad faith claim unless it is accompanied by vexatious, unreasonable, or outrageous conduct.

• Related Article: 5 FAQs About Private Disability Insurance Claims

Vexatious, Unreasonable, and Outrageous Conduct

Whether the insurer’s conduct will be considered vexatious, unreasonable, or outrageous enough (to justify a bad faith claim) depends on the totality of the circumstances.  Generally speaking, conduct will be deemed vexatious or unreasonable if there is no proper justification for the detriment imposed on the policyholder.  This is a fact-based issue.

For example, suppose that you are a disability insurance policyholder.  Some time after you enter into the insurance agreement, you come down with a serious illness, which disables you for a number of years.  There is very little ambiguity with regard to your claim — in fact, the disabling condition qualifies automatically for benefits under the policy.  Your insurer affirms the payout of benefits but delays the payout for a long time.  Given that there is no reasonable basis to avoid paying out the claim, the conduct would likely be deemed vexatious and would give you the right to sue for bad faith.

Contact an Experienced Chicago Bad Faith Insurance Lawyer for Assistance

If your insurance claim has been mishandled (wrongfully denied, excessively delayed, undervalued), then Illinois law may give you a right of action against the insurer for damages pursuant to a bad faith claim.  Insurers have a duty to act in good faith.  Failure to do so may expose them to substantial liability — in some cases, policyholders may even have a legitimate argument for an award of punitive damages.

Here at Bryant Legal Group, PC, our attorneys have decades of combined experience representing the interests of Illinois policyholders against their insurers.  We understand that the wrongful denial, delay, or low valuation of a claim can put the policyholder in an incredibly vulnerable position.  As such, we work closely with our policyholder clients to ensure that they understand their case at every stage of the litigation process, from the internal appeals process to trial.

Call (312) 561-3010 today to schedule a consultation with an experienced Chicago bad faith insurance lawyer here at Bryant Legal Group, PC.

As a long-term disability (LTD) insurance policyholder, you may find yourself in a particularly vulnerable position.  Despite the fact that you have been rendered disabled, your insurer may delay, undervalue, or deny your legitimate claim for long term disability benefits.  Insurers are always on the lookout for opportunities to minimize their various liabilities.  If you are receiving supplemental income, your insurer may see it as an opportunity to avoid having to pay out benefits.

Fortunately, in most cases, you are entitled to received LTD benefits even if you are receiving supplemental income from various sources.  You may even be entitled to work (part-time or full-time), depending on the language of your insurance plan.

Passive Income Sources

Passive income sources (such as rental income, investment income, etc.), will not effect your ability to receive LTD benefits.  Keep in mind that eligibility for long term disability insurance does not depend on your accumulated wealth or level of income — it is a wage replacement that pays out on the basis of you being unable to perform an occupation.  You could ostensibly be a multimillionaire and still receive LTD benefits.  If your insurer denies or unreasonably delays your benefits claim on the basis of your income, then you may be entitled to sue and recover damages on the basis of wrongful denial.

• Related Article: 5 FAQs About Private Disability Insurance Claims

Working for Income

If you are disabled, and you are working for an income — part-time or full-time — then it could affect your eligibility to receive LTD benefits, but only in the sense that your continued ability to work could reflect poorly on your qualification as a “disabled” person pursuant to the language of your insurance plan.

Insurance plans vary significantly.  In some LTD insurance plans, the definition of “disabled” is narrow enough to allow the policyholder to work at their existing job in a part-time, reduced role.  In other plans, the definition of “disabled” may allow the policyholder to work at an alternative job, but they will not be considered disabled if they can substantially perform their existing occupation.  Finally, some plans will only pay out benefits if the policyholder can show that they are rendered incapable of performing any occupation.

How does this play out in real-world terms?

Suppose that you suffer serious injuries that render you disabled to the degree where you cannot work at your existing occupation (physical labor in the construction industry).  Your long term disability insurance plan defines “disability” as the inability to perform one’s existing occupation.  As such, if you work at an alternative occupation, such as non-physical office work, then you could feasibly earn an additional income while still qualifying for LTD benefits.

If your insurance plan defines “disability” as the inability to perform any occupation, then you might have your benefits withdrawn (or denied) due to working.

Qualifying for SSD Benefits

Remember: every insurance plan is different.  Depending on the language of your long term disability insurance plan, you may be required to file for Social Security Disability (SSD) benefits so as to minimize the potential liabilities of the insurer.  If you obtain SSD benefits of $1,000 per month, for example, then your private insurer can use that to offset and reduce their own payment by a proportionate amount.

Generally speaking, you will still be eligible to receive LTD benefits even if you qualify for SSD benefits (though your LTD benefits will be reduced to accommodate the SSD benefits).  Make sure to consult with an attorney to determine how you should approach SSD qualification given the particularities of your insurance plan.

 

Speak With an Experienced Chicago Long Term Disability Attorney for Further Guidance

If you are currently suffering from a disabling condition (and you have long-term disability coverage), then you may be concerned about how your eligibility/benefits are affected by accumulated wealth, or by various supplemental income sources (i.e., rental income).

Your concern is not without merit.  Long-term disability disputes are fairly common.  Insurers often attempt to minimize their liabilities by taking advantage of ambiguous provisions in the insurance contract.  As such, it’s certainly possible that insurer will argue that the existence of a particular income source will reduce your LTD benefits, or that your insurer will even deny benefits altogether.

Here at Bryant Legal Group, P.C., our attorneys have represented disabled policyholders for several decades, helping them to challenge the benefits decisions made by their disability insurer.  Call (312) 561-3010 to connect with an experienced Chicago long term disability attorney today.

If your short-term term or long-term disability insurance plan includes any potential vulnerabilities, that’s okay — you are not without options.  Illinois law requires that ambiguous provisions be interpreted in favor of the policyholder, so any particularly confusing or unclear provisions may not necessarily follow the insurer’s desired interpretation.  Further, even if you are subject to a challenging restriction (i.e., “any occupation” limitations), with the aid of a skilled attorney, you may be able to gather the evidence necessary to prove that you satisfy the requisite conditions.

Potential Vulnerabilities in Short-Term and Long-Term Disability Insurance Plans

Curious about the weaknesses in your insurance plan?  Consider the following.

• Related Article: 5 FAQs About Private Disability Insurance Claims

Percentage-Based Benefits Limited by a Low Cap

Generally speaking, most short-term and long-term disability insurance plans pay percent-based benefits.  If you are a middle-income or high-income earner, then a percentage-based benefits scheme is quite advantageous — for example, if you earn $8,000 a month, and you have agreed to a benefits scheme that involves 60 percent of your salary as short-term or long-term disability benefits, then you could be eligible to receive $4,800 per month.

It’s worth noting, however, that some insurers get around the “risk” of having to pay percentage-based benefits by establishing a cap on liability.  This cap may be rather low in comparison to your potential benefits were the percentage to fully apply.  Taking the above example, though you would otherwise be entitled to receive $4,800 in benefits per month, the insurer might have set a cap at $3,000 to ensure that you cannot obtain your benefits in full.

Plan Establishes an “Any Occupation” Limitation on Disability

Disability coverage may involve an “own occupation” definition of disability or an “any occupation” definition.  What’s the difference?

Own occupation plans allow the policyholder to receive disability benefits so long as they can show that they have been rendered unable to perform the duties of their pre-existing occupation.  This means that a policyholder could ostensibly supplement their income by working a different occupation.

Any occupation plans prohibit the policyholder from receiving disability benefits if they are capable of working in any alternative occupation (that they are qualified for).  For example, if you suffer a severe back injury that renders you incapable of working in your previous capacity as an on-site foreman, your insurer may deny benefits on the basis that you could switch to an administrative desk job (and that you are qualified to do so).

 

Broad Exclusions Built Into the Insurance Plan

Disability insurance plans vary wildly — in some cases, an insurance plan can broadly exclude a number of illnesses, so assess the exclusion categories that are built into your plan.  Some plans do not outright exclude a particular illness or injury, but will establish a significant additional waiting period before you are deemed eligible to receive benefits for the disability at-issue.

Length of Disability Coverage is Insufficient

Length of coverage is of critical importance, and there are significant differences between plans.  Suppose, for example, that you have been diagnosed with cancer, which renders you disabled.  Chemotherapy and surgery processes (and subsequent recovery) may take up to four or five years.  Your long-term disability coverage lasts for only two years, however.  Short coverage periods may lower your premium payments, but can put you in a particularly vulnerable position should you subjected to a serious disability.

Significant Waiting Period for Benefits

Significant waiting periods can force you to pay out-of-pocket when you lack the necessary funds.  Unfortunately, many policyholders gloss over waiting period provisions when signing up for short-term and long-term disability coverage.

Mental Illness Exceptions on Length of Coverage

Some insurance policies may institute certain limitations for policyholders whose disability is caused or contributed by a mental illness.  In such cases, you may still be entitled to receive benefits, but those benefits may be limited.  For example, you may have a long-term disability insurance plan that pays out benefits until standard retirement age (i.e., 65 years old), but the plan may also include a provision that limits the receipt of benefits for mental illness to two or three years.

Contact an Experienced Chicago Private Disability Attorney for Legal Assistance

If you have had your short-term disability or long-term disability claim delayed, undervalued, or denied by your insurer, then you may be entitled to challenge the insurer’s decision.  In the event that the insurer refuses to change their decision following an internal appeal, you may be entitled to sue and recover damages in an Illinois court of law.

Here at Bryant Legal Group, P.C., our attorneys have successfully represented policyholders in a range of disputes with their insurance companies, including disputes that involve short-term and long-term disability issues.  We are committed to our clients, and we recognize that being involved in an insurance dispute can be an emotionally trying and difficult process, particularly if you don’t know how your case is progressing — as such, we strive to keep clients apprised of new developments in their case.

Call (312) 561-3010 to speak with an experienced Chicago private disability attorney here at Bryant Legal Group, P.C.

Business overhead expense (BOE) disability insurance — otherwise known as business expense insurance — serves as replacement “resources” in the event that the policyholder is disabled and is rendered incapable of working, thus resulting in diminished revenues.  BOE insurance is generally purchased in situations where one (or a few) individuals are responsible for generating business revenue, or are otherwise critical to the basic functioning of the business at-large.  For example, a small consulting business with four employees might purchase BOE insurance for its top consultant, as, in the event that the consultant is disabled for a period of time, a substantial portion of client work may grind to a halt.

Insurers often deny BOE insurance claims, or — in some cases — simply undervalue the claim and will payout substantially less than expected.  Given that many small and medium-sized businesses are walking a tightrope with regard to their earnings and costs, the insurer’s wrongful denial of a claim, excessive delay in processing a claim, or devaluation of a claim can have significant consequences for the ability of a business to stay afloat.  With the aid of a skilled business overhead expense attorney, however, you can effectively challenge the actions taken by the insurer and recover the benefits necessary for your business to survive and eventually thrive.

What Makes BOE Insurance Unique?

BOE insurance coverage is quite different than personal disability coverage (individual or group plan-based).  Consider the following.

• Generally speaking, BOE insurance coverage can be quite variable in terms of how long it lasts, but does not exceed four or five years. It is practically unheard of for coverage to extend beyond that period of time, whereas long-term disability coverage for individuals is quite common.
• Illinois state law covers BOE insurance coverage. It is not subject to federal ERISA regulation.  As such, bad faith claims can more easily be brought against the insurer for wrongful denial, unreasonable delay, and other conduct that otherwise interferes with the ability of the policyholder to recover their rightful benefits.
• BOE insurance pays out for more than just lost income of the disabled person — it pays out benefits that account for overhead expenses such as rent, utilities, interest payments on debt, employee salaries, payroll taxes, equipment rentals, maintenance, insurance premiums, professional subscription memberships, and more.
• There is typically a benefit “cap” that limits the total benefits available to the policyholder under a BOE insurance plan.

Importantly, BOE insurance does not pay benefits that are based on projections — the policyholder may only claim benefits for actual overhead expenses that is well-supported by the evidence.

• Related Article: 5 FAQs About Private Disability Insurance Claims

Wrongful Denial of BOE Claims

BOE insurance is intended to give a small to medium-sized business (that is dependent on one or a few individuals) room to “breathe” in the event that key individuals become unexpectedly disabled.  BOE insurance benefits defray the costs of running the business, allowing the disabled person time to recover from their injuries and return to work, or alternatively, giving the business an opportunity to strategically reinvent itself so as to not be so reliant on the disabled individual.

When an insurer denies a BOE insurance claim, they put the business in an unenviable position where the business must immediately readjust.  Small and medium-sized businesses rarely have the ability to adapt so quickly and maintain their revenue stream after the loss of a key individual.  As such, it’s critical that you speak with an attorney who will advocate aggressively for benefits on behalf of your business.  Those benefits could spell the difference between a successful readjustment period and a business collapse.

Insurers may deny or undervalue legitimate BOE claims for any number of reasons, including but not limited to:

• Expense claim is “too significant” given the evidence
• Covered individual is not actually disabled and can return to work
• Exclusionary clause applies
• And more

In BOE insurance policies, it may be easier to prove that the key individual is disabled, as they are likely to have had a variety of responsibilities that are now impossible to meet given their condition.  Whereas a normal employee might arguably be able to return to work and fulfill their duties to a reasonable degree, an employee covered by BOE insurance must have a heightened level of energy and physical/cognitive functioning to accomplish their pre-disability tasks.

Contact Our Team of Experienced Chicago Disability Lawyers Today

Here at Bryant Legal Group, P.C., our disability insurance attorneys have decades of experience helping disabled policyholders challenge the wrongful denial of their claims, including BOE insurance claims.  Insurers thrive on the likelihood that a policyholder will eventually relent and accept an undervalued payout, or in the alternative, may resign themselves to a denial.  BOE insurance claims tend to be even higher-value than personal disability insurance claims, however, and the consequences even more drastic — if a legitimate BOE insurance claim is denied, a business may be forced to downsize, liquidate, or even declare bankruptcy.

Call (312) 561-3010 today to setup a consultation with a team of experienced Chicago disability lawyers here at Bryant Legal Group, P.C.

When a life insurance claim is denied, delayed, or otherwise handled in a way that prevents the rightful beneficiaries from securing the benefits to which they’re legally entitled, it can leave the beneficiaries in a highly vulnerable position.  Not only must a beneficiary shoulder the emotional burden of grieving (and readjusting to a life without their loved one), but if their legitimate life insurance claim is denied, the beneficiary must also come face-to-face with serious financial ramifications — this is especially true in situations where the deceased person provided financial support during their lifetime.

Common Reasons for Life Insurance Claim Denial

Insurers can and will deny a life insurance for any number of reasons, but there are certain common justifications used as a basis for denial.  By understanding these reasons and the insurer’s strategy, you can more effectively challenge the denial of your claim.

Consider the following:

• Related Article: 5 FAQs About Private Disability Insurance Claims

Misrepresentations and Failure to Disclose Information

In the event that the life insurance policyholder dies during the relevant contestability period, the insurer may investigate the policy and determine whether the information on the application is correct, or whether it constitutes a material misrepresentation.  If there has been a material misrepresentation, then the insurer may cancel the policy and deny the payout of benefits, even if you (the beneficiary) qualify for such benefits under the terms of the life insurance policy.  Material misrepresentations need not involve proactive disclosures — in some cases, a failure to disclose information can qualify as a material misrepresentation.

It’s also worth noting that any misrepresentation (or failure to disclose) must be material to the policy in order to justify cancellation of the policy, and subsequent denial of a claim.  In other words, if a misrepresentation involves irrelevant matters, then the insurer cannot deny the claim on that basis.  For example, suppose that the deceased policyholder wrote the wrong address on their application.  An insurer cannot deny benefits on that basis, as the address of the policyholder is not material to the payout of benefits.

 

Coverage Exclusions Apply

Life insurance often differ in terms of their exclusions.  Whereas one life insurance policy may exclude deaths that occur due to voluntary participation in highly-risky recreational activities (such as bungee jumping), another life insurance policy may have no such limitation.  Exclusionary clauses form the core of the value proposition for many life insurance policies — the stricter the exclusions in the policy, the lower the premiums tend to be.

Oftentimes, life insurance exclusions are ambiguously worded.  It’s important to note that ambiguity will generally be interpreted in favor of the policyholder (and their beneficiaries), so with the aid of a skilled attorney, you can — hopefully — interpret the exclusionary clauses at-issue in a way that allows you to secure benefits.

Policy Lapsed Due to Missed Payments

As a beneficiary, it can be difficult to determine — prior to the death of the life insurance policyholder — whether the insurance policy lapsed and is therefore no longer active.  If the policyholder failed to pay their premiums, even for a short period of time, then the insurer may have cancelled the policy, and will use that as justification to deny claims made by the beneficiaries.

Though a policy lapse may seem impossible to overcome, there are certain circumstances under which a beneficiary may still recover benefits.  For example, if the insurer did not send notices to the policyholder (or otherwise warn the policyholder about the prospect of their policy lapsing due to nonpayment), then the beneficiary may invalidate the cancellation and recover benefits.

Designated Beneficiary Issues

Sometimes, the policyholder may not name a beneficiary, or may name a non-specific beneficiary (e.g. their children, their relatives, or their friends) which can lead to an insurer denying benefits to a beneficiary.  The insurer might deny benefits on the basis that the policyholder did not intend to name you as the beneficiary.  For example, if the policyholder named “their relatives” as the beneficiaries, the insurer may argue that certain beneficiaries — say, a niece or nephew of the deceased — are not entitled to recover damages.  In some cases, ambiguity in the designated beneficiary context will default to Illinois state law on intestate succession and inheritance.

Relevant Documentation is Missing

Oftentimes, an insurer may simply deny your life insurance benefits claim due to a lack of documentation.  If you submitted your claim without adequate documentation, the insurer may deny the claim, even if your claim is arguably legitimate and supported by the evidence.  You may not have to sue the insurer to recover benefits under such circumstances — with the aid of an attorney, you can gather the necessary and relevant documentation, and resubmit or appeal the denial.

Work With an Experienced Chicago Life Insurance Denial Attorney

If you have had your life insurance claim wrongfully denied by your insurer, you may be able to appeal the denial or — depending on the circumstances — bring a lawsuit against the insurer and recover damages.

Here at Bryant Legal Group, P.C., our attorneys have spent decades advocating on behalf of life insurance beneficiaries who have had their claims wrongfully denied.  We believe in personalized representation, and to that end, we maintain an open and transparent relationship with our clients, keeping them apprised of new developments in their case, and working closely with them to ensure that their needs are being met.

Call (312) 561-3010 today to schedule a consultation with an experienced Chicago life insurance denial attorney here at Bryant Legal Group, P.C.

In Illinois, and elsewhere, health insurers often act in such an unreasonable manner (that controverts with the expectations of legitimate claimants) that it puts the policyholder-claimant in a particularly difficult, vulnerable position.  Health insurers are always looking to minimize their liabilities, and they do so in a number of different ways: sometimes by denying coverage altogether, and sometimes by undervaluing the claim.  Depending on the circumstances, a health insurer may even choose to delay a payout owed to the policyholder.

Importantly, statutory and common law in Illinois protects those whose health insurance claims have been wrongfully handled by their insurer.  For example, if you believe that your health insurance claim has been incorrectly denied, then you can go through the appeals process with your insurer, and failing to secure a favorable resolution, you can sue the insurer on the basis of a breach of the insurance contract.

Bad faith claims are rather unique, however.  In Illinois, bad faith claims are exclusively statutory in nature, and provide policyholders access to extra-contractual remedies when the insurer has acted unreasonably.

All this legalese can be overwhelming, so let’s begin with a simple analysis of how bad faith claims actually work in Illinois.  If you’re looking for further guidance, we encourage you to contact a Chicago bad faith insurance lawyer here at Bryant Legal Group, P.C.  Our attorneys will assess your bad faith claims and help you secure full and adequate compensation.

How Bad Faith in Illinois Works

In the state of Illinois, most insurance disputes are governed by common law, but bad faith insurance disputes are governed by statutory law.  Section 155 of the Illinois Insurance Code gives policyholders a cause of action for bad faith conduct.  Specifically, when an insurer — in the health insurance context or otherwise — acts in a manner that is vexatious and unreasonable, then the policyholder may recover substantial damages for such bad faith conduct.

Health insurers may act unreasonably in:

• Denying a legitimate claim without basis
• Failing to properly investigate the facts surrounding a claim
• Delaying the processing of a claim, or the payout of amounts due
• Deliberately undervaluing a claim
• And more

The critical consideration is whether the insurer has acted in a vexatious and unreasonable manner.  In other words, the court must determine whether the insurer has acted with an attitude that is particularly intended to frustrate, irritate, exhaust, provoke, or otherwise interfere with the ability of the policyholder to recover.

In Illinois, the “vexatious and unreasonable” determination is based on the totality of the circumstances.  A variety of factors are relevant, but prime amongst them is that of the attitude of the insurer.  If the insurer’s words and conduct demonstrate an attitude towards the policyholder that could be construed as vexatious and unreasonable, then the policyholder may be entitled to recover pursuant to the Illinois Insurance Code.

• Related Article: 5 FAQs About Private Disability Insurance Claims

Consult a Skilled Chicago Bad Faith Insurance Lawyer Today

If you have had your health insurance claim wrongfully denied, delayed, or otherwise handled in a manner that is unreasonable, then you may be entitled to damages for the bad faith actions of the insurer.  Litigating bad faith claims in Illinois is no simple task, however.  Effective litigation demands a team of insurance attorneys who have experience representing health insurance policyholders in similar disputes.

Here at Bryant Legal Group, P.C., our attorneys have spent decades advocating on behalf of health insurance policyholders in a range of disputes, bad faith included.  Call (312) 561-3010 to get connected to an experienced Chicago bad faith insurance lawyer today.