Credit reporting agencies are member organizations to which all disability insurers belong in order to be able to obtain credit information about their insureds. Why are disability insurers so interested in a disabled person’s credit report? What are they looking for exactly?
Interestingly, disability insurers are looking for hidden sources of money. Did the insured just qualify to purchase an expensive house with 40 acres? What about that Mercedes an insured just purchased on credit? How is the insured qualifying for all this credit? Or, better yet, how is the insured paying all their bills on 60% of income?
A typical disabled person is assumed to be poor as a church mouse either just making minimum payments on the credit cards, or overdue in paying bills. This is often a wrong picture since many insureds maintain quite wealthy portfolios of interest and dividend income while on disability. Still, the insurance company also wants to reinforce the idea in the insured’s mind that it has the authority to invade one’s privacy and can do it anytime it wants.
Another “check” the insurance company can do with your signed authoriztion is to obtain information from Social Security to see if there have been any additions to your account for FICA. If an insured is working for another employer FICA contributions are certainly being made on his/her behalf. Filing a tax return with self-employment tax are other indications the insured is working.
Credit checks by disability insurers are NOT cause for alarm. I have never known any claim or any claim situation to be affected by the results of a credit report. The check is merely another incidence of “intimidation” by an authority.
