After your long-term disability claim is denied, you need to file a lawsuit in federal court and if your policy is governed by ERISA, remember, the federal judge will decide your case only based on the administrative record, everything you put into your appeal, so that is a critical point in the case. If the insurance company wants to settle your long term disability claim, how do you determine if that is best for you?
Obviously, part of this depends on the specifics of your case, and if you have a long term disability lawyer, obviously your lawyer can guide you through this process.
Here are some of the general factors most long-term disability claimants should consider about settlement:
If you file your case in federal court and win, the judge cannot award future benefits, so the most you will get are the benefits you are owed since they denied or terminated the benefits. Then you will be back "on claim" - getting the monthly benefits as long as you comply with the terms of the policy, especially providing proof of your continuing disability (we manage all of this for our clients).
Most ERISA long-term disability insurance policies provide you can get benefits if you cannot perform your "own occupation" only for 24 months. After that, you probably have to prove that you cannot work in "any occupation." As you can imagine, this is much harder to prove.
Can you manage a one time lump sum settlement? Also, a lump sum settlement can affect your taxes for that year, something you should talk about with your accountant or financial advisor.
ERISA long term disability denials are difficult to win in federal court. The standard of review and the whole process is desgned to favor disability insurance companies, so critically evaluate your chances of winning in court.
There are a number of factors that go into the analysis of whether to settle any serious injury or disability case - we tell the people we represent that we always prepare the case (this starts very early on) for court, for a trial or judge to decide the case. We think this is the best way to get the best settlement.
If you have any questions about your long term disability benefits or if you received a letter denying your long term disability benefits from your insurance company, please call us at (202) 393 - 3320.