LTD claims: What advisors and clients must know

By Justin Frankel

Based on our experience handling long-term disability claims nationwide, we believe greater transparency and education about underwriting practices, claims evaluation and claimant credibility benefit all stakeholders — policyholders, agents and insurers alike.

How insurers evaluate risk during underwriting and claims review

Disability insurers evaluate risk at two critical points: before issuing a policy and after a claim is filed. During underwriting, insurers assess medical history, occupational duties, income and disclosed health conditions to determine eligibility, pricing and exclusions. This process is designed to evaluate future risk and ensure coverage aligns with the applicant’s disclosed profile.

Once a disability claim is submitted, the focus shifts substantially. Claims review centers on whether the claimant meets the policy’s definition of disability and remains eligible for benefits over time. At this stage, insurers analyze medical records, functional capacity, vocational factors and compliance with treatment. These reviews are often ongoing and may intensify as a claim progresses.

While insurers are entitled to investigate claims, it is important to note that the claims process is inherently adversarial. Decisions are driven by policy language and financial exposure, making clarity and consistency in documentation essential for claimants.

How claimant credibility is assessed

Credibility is a central factor in nearly every LTD claim. Insurers evaluate credibility by reviewing the entire record for consistency over time, rather than relying on any single document or statement. Common issues insurers raise include perceived inconsistencies between claimant statements and medical records, gaps in treatment or a lack of detailed functional evidence. Activities observed through surveillance or social media may also be cited, often without full context.

From a claimant-advocacy perspective, credibility is best supported through accurate, consistent reporting and thorough medical documentation that focuses on functional limitations, not merely diagnoses. Treating physicians play a critical role by detailing how symptoms affect the claimant’s ability to perform occupational duties on a sustained basis. Our experience shows that many disputes arise not from dishonesty, but from misunderstanding how closely insurers scrutinize records and how easily isolated details can be misinterpreted.

Practical guidance for insurance agents and advisors

Insurance agents are often the first professionals clients turn to when disability strikes. As such, agents play an essential role in shaping expectations and helping policyholders navigate the process responsibly. We believe agents can best serve their clients by:

Setting realistic expectations that a disability claim is a formal, evidence-driven process
Emphasizing the importance of ongoing, well-documented medical care
Helping clients understand that functional capacity, not just diagnosis, determines eligibility
Recognizing when a claim becomes complex or contested and recommending experienced claimant-side counsel

Clear communication at the outset can prevent confusion, frustration and inadvertent missteps that may harm an otherwise valid claim.

At its core, long-term disability insurance provides financial protection when individuals can no longer work due to illness or injury. Ensuring that claims are evaluated fairly —and that policyholders understand how the process works — strengthens confidence in the system as a whole.