Is there such thing as 'good bad faith?'

Bad faith is a phrase used to describe insurance company behavior when they fail to keep the promises in the policies they issue. 

In long-term disability insurance for professionals, bad faith takes these forms:

• Refusing to pay benefits
• Refusing to conduct a proper investigation of your claim
• Delaying payment of benefits
• Using deceptive practices

Bad faith is a loaded phrase because it implies that insurance companies are bad and lying to you. In the case of long term disability insurance policies, you have paid a large monthly sum to protect your future against accident and illness. It is infuriating when the insurance company says no. For many professionals, denial is the emotional equivalent of a neutron bomb going off.

So, is there such thing as "good bad faith?"

Not when you're legitimately disabled and your claim is denied.

The best way to think about bad faith is to step back and look coldly at the insurance business. Insurance companies do not really see you, a human being and their paying customer, as their primary constituency. Their primary constituency is their investors, who want good return on investment. Paying you what they promised is, well, bad for business.

If they can say no, reduce your claim or entangle you in their process, that's good for their bottom line. If they can identify any reason not to pay your claim immediately and in full, they will embrace it. What is bad faith to you seems like good business to them.

Never expect long-term disability insurance companies to pay out without thinking long and hard about your case. It's not personal, even though it is intensely personal for you.

The problem of emotion

These cases are emotional, because the policyholder feels betrayed, and at the most vulnerable moment - when they are sick or injured, and their once-bright future has clouded over.

Before you work with a lawyer, chances are you have had angry exchanges, slammed phones and lost sleep wondering how to go forward.

Lawyers are useful in these cases because they take you out of the argument. They dial back the emotion and cast a cold eye on the facts of the case. This benefits both you and the outcome of your case. Let an experienced attorney fight and win this cold war for you.