Income protection insurance provides a source of replacement income to people that get sick or injured and are unable to work. However, sometimes, insurers decide to reject income protection claims or pay you less than your full entitlement. This blog gives some guidance on what steps can be taken if your income protection claim is denied or the full benefit is not paid to you.
Income protection claim rejected due to unsupportive doctors
Most income protection insurance claims require that you satisfy the following requirements to be entitled to benefits:
- You cease work due to illness or injury;
- You are unable to do your job or the important duties of your job, or any job (depends on the policy terms) due to illness or injury; and
- You are under the care and attention of a doctor and following the advice of that doctor (or similar).
Doctors have a key role in confirming that the above applies to you, and your doctor’s support is usually obtained using monthly income protection claim forms. However, if your doctors are unwilling to complete the claim forms or are unwilling to say, on the claim forms, that you are unable to work, you may be entitled to a reduced benefit only (a partial disability income protection benefit), or your claim may be rejected altogether.
Appealing the insurer’s decision when your doctor was not supportive of your claim
If your income protection insurance payments are reduced, or your claim is rejected altogether, you have options:
- Speaking directly to your doctor to see if they will change their opinion. Sometimes giving some context or further explanation about what the terms in the claim form mean can assist in obtaining your doctor’s support.
- Seeing another doctor to ask them to complete the reports. It can be worthwhile getting a specialist to comment as they sometimes have a better understanding of your illness compared to a GP.
- Speak to a health professional that isn’t a doctor (for example, a physiotherapist or a psychologist) who is involved in your treatment. Sometimes a report from allied health professionals can help a doctor to change their mind about your condition and work capacity.
- Speak to a medicolegal doctor to get an opinion about your work capacity.
If your income protection claim is rejected or paid at a reduced amount, we can help you to work out why and obtain the necessary material to assist. We can also help by writing to your insurer and requesting a review of the relevant decision.
Income protection claim rejected because you were not under the care of a doctor
The most common issue which arises with income protection claims is that the claimant was not under the care of a doctor at the time the claim was lodged and assessed.
Many people cease work due to illness or injury but are not always seeing a doctor regularly at the time. This may be because their illness is a chronic illness and their doctor has said that there is little in the way of treatment which can be offered. Another reason is the cost and/or lack of available medical treatment (particularly in regional settings).
Your insurer may decide that the fact you were not seeing a doctor at the time of your claim is sufficient reason to deny your claim or delay the first payment of your income protection entitlement.
Delaying the first payment might mean that your ongoing monthly benefit payments are reduced. This is due to your pre-disability income being calculated over a 12-month period (as is usually the case) that takes into account some period of time that you are not at work. That is, if you cease work in January due to illness or injury but do not see a doctor for that injury or illness until April, the insurer may decide that your payments should start in April (not January) because you were not under the care of a doctor and, therefore, did not support the relevant definition until April.
This is a problem because the rate of your income protection payments is worked out based on your income in the 12 months before you satisfied the definition. If this is April and the period includes 3 months in which you were not working, the rate will be much reduced.
If this happens to you, there are remedies available to you under the Insurance Contracts Act, and we can provide free advice about your options.
Returning to work
A successful income protection claim and subsequent insurance payments do not require you to have a permanent work incapacity, unlike TPD claims. So, it’s OK if your inability to work is temporary.
However, if you do return to work after receiving income protection benefits, your insurance payments will stop unless you are earning less than you were pre-disability. If your earnings are reduced due to your illness or injury (for example, you were full-time before your injury/illness and you return to work part-time), you will usually be entitled to be paid a reduced benefit, called a partial disability benefit.
Get help from an income protection lawyer
If you are looking to lodge, or have lodged, an income protection claim and require some guidance on a rejection or a reduced rate of payment, you should get in touch for some free advice. We are insurance experts and will be able to answer all of your queries.
Contacting Berrill & Watson
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