Disability attorney Stephen Jessup discusses why a disability insurance company will request a claimants tax returns.
The insurance companies are going to ask for your tax returns for a handful of reasons. First and foremost, it’s just to make sure you’re not working if you’re telling them that you are not working. Secondly, they may ask for them and if you have a residual disability claim, that’s going to be a basis to determine what your previous ability income was and when it comes into determining what your benefit amount is going to be under that residual disability definition.
Also, they may look on your tax returns and see that you have involvement in other corporations, so they may want to investigate that to really determine what your pre-disability occupation was. Some policy provisions will have it that they will consider every job you’re doing. So the tax returns are a way for the insurance companies to fully investigate so they have an idea in their mind of what your job duties were, or in the event of an ERISA group claim, it may be something that you may be able to do for any occupation definition. So there are various different reasons for it, but it’s not uncommon that they ask you for your tax returns.