When approximating settlement value, the starting point is to determine the number of months from the date of denial to the benefit end date, usually age 65.  This number must then be reduced by a present value discount calculation to account for the time value of money, because the combination of interest and inflation makes money paid today worth more than money paid at a later date.   Once this discounted value of the LTD policy is known, further discounts must be applied to reflect various contingencies, including:  

• The strength of the medical evidence. Does your family doctor support disability? Does a treating specialist support your claim as well? Are you getting regular treatment? What are the opinions of the experts on both sides?
• The nature of the illness or injury. Some causes of impairment are degenerative with little chance of improvement.  Other illness are likely to get better over time.
• The test of disability. The definition of “total disability” or “totally disabled” usually changes from being disabled from your “own occupation” for the first two years to “any occupation” after two years. Some claims are very likely to be successful for the first two years, and less likely to succeed beyond the change of definition. 
• Life expectancy.  Some disabling medical conditions significantly reduce life expectancy.  If there is an elevated risk of death before age 65, the insurer will be reluctant to pay too far into the future.
• Possible return to work. If there is evidence of a potential return to work, this reduces the settlement value of your LTD claim.  
• CPP Disability. Insurers are generally entitled to a reduction or offset for CPP Disability.  This can have a large impact on the settlement value of your claim, especially when CPP Disability eligibility has not yet been determined. 
• Litigation risk. No case is perfect.  The insurance company had some basis, however weak, for denial of the claim. Managing risk to avoid going to court is an important consideration.

There are of course other factors which will affect the value of your long term disability claim.  This calculator is therefore limited to roughly estimating a settlement value.  For a more accurate assessment, contact Michael Jordan today for fast, free long term disability legal advice.