Whether you’ve just appealed a disability insurance denial or are ready to file a disability insurance lawsuit against your long term disability insurance carrier, you may be wondering what to expect from the process. Each disability insurance carrier has different policies and procedures, and Principal is no different. Learn more about what to expect when you sue Principal for disability insurance benefits, whether you have a group or an individual long term disability insurance policy.
The Litigation of a Group Disability Policy Governed by ERISA Differs from a Private Policy
Many disability insurance carriers tend to primarily offer either group or individual long term disability insurance policies, although Principal offers a good mix of both policy types. Group disability policies that are litigated under the Employee Retirement Income Security Act (ERISA) are very different from private individual policies litigated under state contract law, and the path your disability insurance claim will take during litigation depends on the type of policy you have.
ERISA or group disability claims require claimants whose claims are denied to take one mandatory appeal, asking the disability insurance carrier to look over the case again. Once an appeal has been decided, the claimant may sue – but the case will be referred to mediation before it’s brought to a judge.
On the other hand, individual long term disability policies are litigated in state law, with jury trials available, and without internal appeal and mediation requirements. This can allow these claims to resolve themselves more quickly, often in the form of an out-of-court settlement.
How Long Will a Disability Lawsuit Against Principal Financial Take?
The answer to this question again depends on whether a claimant has an individual or group disability insurance policy. Because ERISA policies are litigated under federal law, their timelines are a bit more predictable; it generally takes about a year to get to trial. And this trial isn’t like the ones you often see on television. These cases are generally decided on a paper record, with no direct witness testimony or oral argument available. This is the reason it’s important to get your ducks in a row early, as the strength of your claim depends entirely on how good it looks on paper.
Individual insurance policy lawsuits can take a year or longer to resolve themselves as well. Because the standard of review is more generous than in ERISA cases, individual lawsuits tend to settle well before trial, shortening the timeline a bit. Individual long term disability policies are litigated under state contract law, not federal law like ERISA claims. Jury trials are available, and to recover benefits, the claimant needs only to show that they’re too disabled to work (according to the policy’s definition of disability). In most cases, this is an easier standard to meet than the standard applied to ERISA claims.
Why Do 95% of Disability Lawsuits Resolve in a One Time Lump Sum Settlement?
The vast majority of long term disability claims we see resolve themselves well before any trial can be scheduled. In most cases, these settlements involve a lump sum payment intended to buy out the long term disability insurance policy. This essentially allows the insurance carrier to sever legal and financial ties with the claimant. Claimants have some cash in the bank and no longer have to worry about being suddenly cut off from benefits, while Principal has a way to quantify its losses and move on. Because insurance companies always have a vested interest in settling a claim for as little as possible, it’s important to seek legal advice before accepting any settlement offer. Even if a dollar amount sounds generous to you, it may not be enough to fairly compensate you based on the strength of your disability claim and the language of your long term disability policy.
There are no Legal Fees or Costs Unless We Make a Recovery of Benefits
At Dell & Schaefer, we know how tough it can be to go up against these major disability insurance carriers alone. When we represent long term disability claimants in a lawsuit against their insurance carrier, we don’t charge any fees or costs unless we recover benefits on your behalf. This provides us an incentive to win and settle cases – if we don’t, we don’t get paid. If you’re ready to get started with your long term disability lawsuit, give us a call today to set up your FREE consultation.