If my disability insurance claim denial is reversed will I receive interest?

The answer to this question depends on the level in which you win your disability case and the type of disability policy you have. Under most group (ERISA) and individual disability insurance policies you will not receive interest unless you win your case prior to the filing of a lawsuit. However, there are some disability companies that will pay interest if disability benefits have been delayed or wrongfully denied prior to filing a lawsuit.

If you win your disability case after the filing a lawsuit and entry of judgment by a court, then the Judge will have the discretion to issue an award of interest for the period of time that you have not received any benefits. The amount of interest you are entitled to receive is usually discretionary with the Judge, but the applicable rules to determine an award of interest and the rate to be used are different in State and Federal Courts. The state court interest rates are usually higher than the federal court interest rates. In some long term disability insurance policies there is language in the policy which specifically states the amount of interest that will be paid if disability benefits are delayed or wrongfully denied.

Read our article on pre-judgment interest to learn more.

Comments (2)

  • Rocky,

    Unfortunately, ERISA laws do not require payment of attorney fees or interest at the Appeal level.

    Gregory Dell Feb 4, 2013  #2

  • I was denied benifits and had to hire a disability attorney, we won the appeal; I got no interest nor attorney fees. Is there jargon to receive both?

    Rocky Feb 1, 2013  #1

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