Financial ratings service Moody’s has upgraded its negative outlook on the US insurance sector from negative to stable – good news that points to expectations that the national economy is finally moving forward in a positive direction. The projected rise in interest rates will especially benefit annuity products with long-term guarantees (e.g., payout annuities, structured settlements); old blocks of individual fixed annuities with high guaranteed rates; life insurance products with embedded interest rate guarantees (e.g., universal life insurance policies); and certain specialized long-tailed health products, including long term disability and long-term care policies.
The tidy equation of rising interest rates and reports of dropping unemployment reports combine to bring higher yields to the investments owned by the insurance companies, increased demand for products by more working Americans and a willingness to protect future earnings. What does that mean for claimants?
A few points to bear in mind: no matter how healthy the insurance sector, don’t expect insurance claims adjusters to become beacons of generosity. Their job has always been, and will continue to be, to protect their employer’s bottom line by reducing or limiting benefit payments.
Unemployment figures have always been deceptive, and today’s numbers are far too complex to reduce to a simple equation. A recent New York Times analysis reports that the numbers of Americans counted as unemployed have fallen, but this is only because more people have given up on looking for a job and, more pointedly, of those who have given up looking for a job, many are turning back to other sources of income, including disability benefits.
Adding to the complexity – if it can be assumed that many of those who have given up on finding employment were near retirement age – Baby Boomers – and they have chosen to take early retirement rather than continue to struggle to find a paid job, then the number of workers in the economy will have permanently decreased – not a good sign for the economy or the nation in the short and long run.
One thing we can be sure of – the insurance sector will do what needs to be done to protect itself and its assets. And that means that minimizing exposure by reducing or limiting disability insurance benefits will continue to be a corporate strategy by all long term disability insurance companies.
If you have an LTD claim and are concerned about receiving benefits, or if your LTD benefits have been denied or delayed, call our office today to find out how we can help. There are strict time limits in claims appeals, so don’t delay.
Justin C. Frankel is committed to fighting for the rights of clients when their long term disability insurance claims have been denied, delayed or terminated.