Beware of unreasonable Prudential Disability Insurance lump sum buyout offer
Our law firm was recently contacted by an individual that was receiving long term disability income payments from Prudential. This disability claimant has been on long term disability for approximately 12 months. His disability is the result of a disabling knee condition. His Prudential long term disability policy defines “disability” for the first 24 months as the inability to perform the substantial and material duties of his occupation. After 24 months the definition of disability changes to the inability to perform the material duties of any gainful occupation. Gainful occupation is an occupation that will pay at least 60% of the claimants pre-disability earnings. This is known as the “any occupation” definition.
This disability claimant received a letter from Prudential offering a lump sum buyout of his disability policy in exchange for the full surrender of his long term disability policy and the advance payment of an additional 12 months of disability benefits. The claimant advised me that he spoke with someone at Prudential and they said he should take the offer because he will not be eligible for benefits when his definition of disability changes to “any occupation.” This particular claimant is not only having medical problems with his knees, but he is experiencing hip and back problems. I advised this particular claimant that there is a high probability that he will remain eligible for disability income benefits when his definition of disability changes. I also advised that since you have no idea what your medical condition will be in the next 12 months there is simply no reason to take the buyout and give up your policy. “I also advised that is was wrong and misleading for the Prudential representative to persuade the claimant into believing his benefits will end at the end of 24 months”. If this claimant were to accept this unreasonable lump sum buyout offer, he would likely be giving up his rights to over an additional $500,000 of long term disability insurance benefits.
Prudential is one of the top three largest group long term disability insurance companies and this recent buyout offer may be an indication of a new strategy they have implemented in an effort to eliminate their long term disability claim exposure. Lump sum disability buyout offers must be considered with great caution and you must understand all of the terms of your disability policy in order to make the right decision.
Contact us for a free consultation if your disability insurance company has made you a lump sum offer or if you are interested in obtaining a lump sum buyout offer. Our disability insurance attorneys have negotiated and advised disability claimants on hundreds of disability lump sum buyouts.
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Have rec’d LTD benefits almost 3 years. I qualify for any occupation. The soc sec ALJ also stated that I could not qualify for any gainful employment positions in thr nat’l economy. My concern going forward is that the Insurance Carrier (Standard) will find some goofey reason to deny me, and by hiding behind discretionary authority, they will succeed. I recently was sent a letter from ENGINIX requesting a lot of information. I told Standard that because of ENGINIX’S fraud conviction, I was hesitant to provide any information. I wrote Standard a letter stating my concerns and wanted to know who would review the info and a copy of thier privacy policy. Haven’t heard from them yet. I think Enginix is a subrogation company. Should I sign and return the info. I want your opinion not legal advice.
Tom, Standard uses third party companies to request medical records during long term disability claims. According to HIPPA laws you have privacy rights when it comes to medical records. You have an obligation to provide Standard with your medical records. You need to read the Authorization that Standard wants you to sign very carefully. If you limit their ability to get medical records, then Standard can deny your long term disability benefits. You can get all the records yourself and send it to them or tell them that you want specific medical authorizations for any entity they want to request records from. Do not tell them you will not release records as they will deny your claim. You should also be aware that Standard will likely call your doctors or send letters to them with one sided questions. You should only deal with Standard in writing.