Lump Sum In Lieu of Future Disability Payments?

Frequently an insurance company that has been paying monthly disability payments to you will offer to cash you out. What this means is that in lieu of the future monthly disability benefit payments they will offer to fully discharge the future obligations by paying you a lump sum of money. You will receive a letter from them outlining what will be paid and how the amount will be calculated.

Before agreeing to settle on this amount, several factors need to be assessed such as the present value of your claim; your statistical life expectancy; and the anticipated future interest rates. It is imperative and often required by the insurance company that before accepting this amount you consult with an attorney.

An attorney who is experienced in handling disability claims will review the claim not only from the standpoint of the fairness of the cash out offer but also among other things will review the insurer’s calculation of the monthly disability benefit, (which may be in error) and the interest rate used by the insurer in calculating present value. For example, our office recently reviewed a cash out offer by CIGNA where we found that over several years CIGNA had been underpaying the monthly benefit. We not only recovered those benefits for the client, but also obtained a much larger lump sum buyout for the client.

When you get one of these letters you should immediately contact an experienced disability attorney. Often the insurance company will pay for an attorney to review the buy out agreement. So you truly have nothing to lose in contacting an attorney.

If you want more information about buy-outs or other insurance issues, go to our web page at www.stennettcasino.com where you will find contact information to either call or email an expert in these areas.

My Disability Claim is Denied - Next Step

You receive a letter from your insurance company advising you that your disability claim is denied or terminated. After the initial shock wears off, what steps can you take to obtain your disability benefits? What you should NOT do is immediately write back, telling your insurer they have made a mistake, and ask them to reconsider your claim. You will eventually want to do so; however, there are several steps you need to take first.

If your disability policy is part of an employee benefit plan then it is probably governed by Federal Law known as the Employee Retirement Income Security Act (ERISA). Under ERISA, the insurer/plan must give you 180 days following a termination or denial of benefits in which to request an administrative appeal or review of your claim. However, most plans give you only one shot at an appeal. Thus, you must use this opportunity wisely.

The first thing you should do is request from the insurer, a copy of their entire file on your claim. They are obligated to provide it to you, without cost, within 30 days of a written request. Once you receive this file you should go through and organize it in some fashion, i.e, putting all the medical records together segregated by provider and in chronological order. Once you have organized the file it will be easier for you to see what is missing from the records. If they had your file reviewed by their own medical or vocational consultants, you will see their reports and have a better understanding of why they denied or terminated your claim.

You should also obtain, if you do not already have it, a copy of the plan or disability policy that sets forth all your rights and obligations. You should be able to obtain the policy from the administrator of the plan who is typically the employer. However, if there is a claims administrator, then they will most likely be able to send that document to you.

It is at this point I would strongly suggest you contact an attorney. An initial conference with an attorney should not cost you anything. However, make sure the attorney is experienced in handling ERISA benefit claims. The law applicable to these claims is unique and technical. If you have done your homework and have the claim file, the policy and your letter of denial, you should be able to answer many of the questions the attorney will have to help you evaluate your claim. You are most likely emotionally attached to your claim and getting input from an experienced attorney can often be enlightening. Remember, the fact that you are disabled does not guarantee that you will receive benefits. It does not matter how many times you tell the insurer that you are in pain and cannot work. What is important is the presentation of evidence that sets out your physical limitations associated with your illness or injury and how those limitations preclude you from performing the duties of a job.

If you want more information about ERISA or wish to talk to or email an expert about your claim, visit our website at www.StennettCasino.com.