When Insurers Get It Wrong: Understanding the Pitfalls of Denied Long-Term Disability Claims

If you’ve been denied long-term disability (LTD) benefits, you’re not alone. Insurance companies often get it wrong—and when they do, the consequences can be devastating for claimants who are left without the financial support they need.

In my experience as a lawyer representing clients in these cases, I’ve seen time and time again how insurers misinterpret policies, overlook critical medical evidence, or apply unreasonable standards to deny valid claims. Let’s unpack some of the common pitfalls insurers fall into when assessing LTD claims and what claimants need to know to protect their rights.

The Definition of Disability: It’s More Complex Than You Think

One of the key areas where insurers get it wrong is in interpreting the definition of “total disability” within their policies. This definition is not as straightforward as it may seem. While the exact language varies, most policies define total disability in two stages:

1. Own Occupation Period: Initially, the claimant must show they are unable to perform the substantial duties of their own occupation.
2. Any Occupation Period: After a specified period (often 24 or 30 months), the standard shifts, requiring the claimant to prove they are unable to perform any occupation for which they are reasonably qualified by education, training, or experience.

Insurers often misapply these definitions, resulting in wrongful denials. For example, courts have highlighted the importance of considering whether it was reasonable to expect a claimant to find and maintain employment, and whether a reasonable employer would even hire them given their condition. This underscores that disability is not just about physical ability—it’s about practical, real-world employability.

Substantial Ability vs. Absolute Ability

Another common mistake insurers make is assuming that if a claimant can perform some tasks, they are not disabled. However, courts have repeatedly clarified that total disability does not require absolute inability to work.

Courts have rejected the argument that being able to perform certain duties of an occupation negates a claim for total disability. Instead, they focus on whether the claimant can perform their duties to a “substantial degree.” Disability must be assessed holistically, taking into account the claimant’s ability to perform their occupation as a whole.

This principle is critical because many people with chronic conditions or disabilities may still be able to perform certain tasks on occasion—but that doesn’t mean they can sustain employment in a meaningful or reliable way.

The Real-World Approach: Looking Beyond Medical Evidence

Insurers often rely heavily on medical reports to assess disability, but they sometimes fail to consider the broader context of a claimant’s life and work. Courts, however, have emphasized the importance of a “real-world” approach.

For instance, courts have assessed not only a claimant’s physical ability to perform work but also factors like age, limited education, and the need for workplace accommodations. In some cases, while a claimant might be physically capable of certain tasks, it was practically impossible for them to find and maintain employment given their circumstances.

This illustrates how insurers can’t simply point to theoretical jobs that a claimant might be able to do. They must consider whether those jobs are realistically accessible to the claimant given their limitations.

The Role of Reasonable Employers

One of the most telling tests for total disability is whether a reasonable employer would hire the claimant. This approach focuses on the practical realities of employment. If a claimant’s condition—such as chronic pain, unpredictable symptoms, or mental health challenges—prevents them from working reliably and consistently, they are unlikely to find or keep a job.

Courts have noted that illnesses causing “waxing and waning” symptoms or making regular attendance impossible create significant barriers to employment. A reasonable employer would not hire someone under such conditions. Disability assessments must go beyond theoretical capability to address real-world employability.

Mental Disabilities and Chronic Pain: Frequently Denied, Often Valid

People suffering from mental disabilities and chronic pain are among the most likely to have valid claims denied by insurers. These conditions are often invisible, making it easier for insurers to dismiss them as insufficiently proven or exaggerated. Yet, for those living with these challenges, the impact on daily life and employability can be profound.

For example, chronic pain can make it impossible to sit or stand for extended periods, while mental health conditions like depression or anxiety can severely impair focus, stamina, and the ability to interact in a workplace. Courts have recognized these realities and have often stepped in to hold insurers accountable for dismissing such claims without proper consideration.

How Claimants Can Protect Themselves: A Lawyers Perspective

If your LTD benefits have been denied, it’s important to act quickly and strategically. Here are some steps you can take:

1. Understand Your Policy: Carefully review your policy’s definition of total disability and any other relevant provisions. Pay attention to time limits for appealing a denial.
2. Gather Strong Evidence: Work with your healthcare providers to obtain detailed medical reports that clearly outline your limitations. Be sure to address not just your physical or mental health, but also how your condition impacts your ability to work.
3. Consult a Lawyer: Navigating an LTD denial can be complex and stressful. An experienced lawyer can help you build a strong case, gather the right evidence, and advocate on your behalf.
4. Challenge Misinterpretations: If the insurer has applied the wrong standard or overlooked key evidence, you have the right to challenge their decision. Courts have shown time and again that they will hold insurers accountable for unreasonable denials.

Final Thoughts

Insurers often get it wrong when it comes to denying long-term disability claims. They may misinterpret policy language, ignore real-world considerations, or set unreasonably high standards for claimants. But the courts have provided clear guidance: disability must be assessed holistically, with a focus on practical employability and the realities of the claimant’s condition.

If you’ve been denied LTD benefits, don’t give up. With the right approach and potentially a lawyer’s support, you can challenge the denial and fight for the benefits you deserve. Remember, you don’t have to navigate this journey alone.