STEP 2: Appeal or Lawsuit
You have the right to appeal and the right to commence a lawsuit.
Very few LTD appeals are successful. The appeal is not decided by an independent decision maker, but is to the same company that denied your LTD claim in the first place. Unless there is new compelling evidence not available at the time of denial, most appeals are doomed to fail. Some companies will allow up to three appeals. Each appeal can take months. You should consult a long term disability lawyer before appealing on your own. Michael Jordan will assist with your appeal free of charge. Also consider the tips in the blog post: How To Write a Long Term Disability Appeal Letter, Top 10 Tips.
Unlike appeals, lawsuit success rates are very high: more than 95% for a skilled long term disability lawyer. Once you retain an LTD lawyer, there will be no more direct contact with the insurance company. Your lawyer will handle everything. This will include obtaining the insurer’s file and analyzing it to discover errors, mistakes, and weaknesses; preparing a statement of claim and issuing it with the court; obtaining and paying for updated medical and other records that support your claim; securing and paying for expert opinions; attending to all legal issues as they arise; and, negotiating the settlement of your LTD claim. You are involved as much or as little as you want to be while the litigation is ongoing.
It is important to consult with an LTD lawyer before deciding between an appeal and a lawsuit.
Step 3: Settlement
There are two types of LTD settlements. The first is reinstatement, where past benefits owing are paid and the insurer resumes payment of monthly benefits. If your appeal is successful, you are back “on claim”, meaning the insurer can request more medical records, send you to assessments, conduct surveillance and other investigations, and require your participation in specific treatment or rehabilitation efforts. There is nothing preventing the insurance company from denying the LTD claim again at some unknown point in the future.
The second, and more common type of settlement, is “full and final”. This type of settlement usually only occurs when a lawsuit has been commenced. It is unlikely that an appeal would result in a single lump sum amount for both past and future benefits. The amount of the lump sum settlement is determined by many factors, including the value of past benefits owing and the value of future benefits for the remainder of the policy, typically to age 65. This sum is then reduced for the relative strengths and weaknesses of the case, the present value of money, and other factors. The settlement will either be entirely tax free, or mostly tax free, depending on your policy. You will be done with the insurance company, although you can usually maintain your medical and other benefits.