Denied Or Cut Off Your Long Term Disability Claim? Why You Should Skip The Appeal And Get A Lawyer
If your insurance company denies your long term disability claim, don’t wait. Get a legal opinion, and here’s why…
I’ve talked about this before: Your insurance company has denied your claim or cut you off your long term disability benefits – now what?
The ins and outs of why they have denied your claim are all tied to the policy and its many intricate details.
Here’s one thing you can be sure of: Your insurance company will offer you an appeal process if you don’t agree with the denial. It sounds like a logical next step, but it’s actually where many claimants find that things go wrong…
The Appeal Process Is Internal
It’s understandable that you might want to try to appeal the decision yourself first, using the company’s process, and only turn to a lawyer if you lose the appeal.
But you have to remember one thing: The appeal process that you are being offered is internal to the insurance company.
In other words, your file will not be reviewed by an independent third party. It will be reviewed by an internal group or person.
As a result, people are rarely successful in the appeals process.
Think about it: The insurance company has already denied your claim once, so unless you are appealing with very compelling NEW medical evidence in hand, your chances of success are extremely low.
Time Is Of The Essence
There is a secondary risk you assume when you chose to go down the appeal road before contacting a lawyer.
Your low chance of success is compounded by the fact that once they have made the initial denial, the limitation period (in Ontario this is two years) begins to run from the initial denial date; NOT the date of the appeal decision.
Insurers rarely tell you how long you have to sue or when the limitation period began to run. Often, hidden in the general language is a clause stating that, by considering your appeal, they are not waiving their rights under the policy including a limitation defense.
The above statement may seem murky to understand, but the results are clear:
You run down the clock by making several unsuccessful appeals which generally move slowly. By the time you have exhausted your appeals, you’re close to the two-year time limit.
You have to quickly turn to a lawyer who, in turn, will scramble to build your case in time.
Scrambling to build your case with a lawyer at that stage is difficult at best, as they haven’t been involved from the beginning, ensuring that the medical information and other data are all in order.
This is why I feel that the internal appeal process puts most people at a serious disadvantage. I’m not saying this happens in every case, but why take the risk?
The best course of action is always consult a lawyer after the first denial.
What A Lawyer Will Achieve For You
A lawyer will generally work to seek a settlement over putting you back on benefits. There’s a number of reasons why:
The first is your piece of mind. You’ve been denied once already. Returning to your claim (think: regular payments) would be delaying the inevitable for you, which is that you would again be denied at some point and be back to square one.
It also means that you would (once again) be subject to the terms of the policy which include continuing to be under doctor’s care and ensuring that reports are constantly sent to your insurer; exposing yourself to attend further Insurer medical examinations, etc.
I think of it like a stressful relationship that won’t go away. Thus the best option is to get a divorce from your claim. A lawyer will negotiate with the company on your behalf, getting you a fair settlement and getting the insurance company out of your life once and for all.
The second reason is money. You see, some monthly LTD payments are taxable. Your insurance company issues a T4A slip at the end of the year and you pay tax on each and every payment.
In contrast, even in cases where the monthly payment is taxable, settlement funds for future LTD benefits are not taxable. Any funds paid to date as part of the claim will still be taxable, but your future settlement funds are not.
For most of my clients, this is an even bigger motivator than the idea of never hearing from the insurance company again.
How Do We Determine A Settlement Amount?
Ultimately, a settlement is based on the fixed amount noted in your policy. The good news here is that, while other personal injury suits can take a few years to resolve, long term disability suits can average one year.
The next question is, if the amounts are dictated by the policy, why does it even take a year?
Well, remember that you’ve already been denied, so naturally, the insurance company is going to start at zero. They will maintain their view that you are not disabled and therefore not entitled to anything.
On the other end of the spectrum, your lawyer will start at the maximum you are entitled to based on your policy, counting up to age 65, assuming that you are disabled.
The final number will be a sum that takes into account your relative level of disability and other contingencies.
It sounds simple enough, but, to the average person going it alone, it presents a minefield of deadlines, paperwork, medical reports and nuance. Beginners luck does not exist when going up against the big Disability Insurers.
It is my absolute belief, based on experience, that negotiating with an insurance company that has enormous resources at its disposal is best left to someone who is experienced and has your best interests at heart.
If you’ve been denied (or suspect you’re about to be cut off), or you have questions about your policy or an appeal, make sure that you contact a lawyer early on. It doesn’t mean you have to hire that lawyer, but forewarned is forearmed and, when you take on an insurance company, you’re going to need allies.
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