• What Does Payment of Disability Benefits Under "Reservation of Rights" Mean?

What does it mean when a disability insurance company pays disability benefits under a “reservation of rights”?

Disability attorney Cesar Gavidia discusses what it means when a claimant receives payment under a “reservation of rights”.

Payment under reservation of rights can continue from up to three months to six months, even up to a year, depending on how long the insurance company is taking to evaluate your claim. They could either, after reservation of rights have been paid, they could terminate your benefits or they could lift reservation of rights of paying your normally under your disability policy. If you have any issues regarding payments from your insurance company, please don’t hesitate to call us.

Comments (4)

  • Marie, I am sorry to hear of your issues. Under the ERISA laws, the insurance company typically has 45 days to give an answer on an application, but I believe they can take two extensions of 30 days each while they review the information on an application. However, your scenario is unique as they are paying your claim, though under a reservation of rights (ROR). Paying under a ROR effectively means they have approved your claim, though they are still reviewing it, so I am not sure of any time limitations that they are bound to. With most LTD claims, the insurance companies constantly review approved claims and they can do so at their discretion. Should Unum deny your claim or delay your benefit payment, please contact us at once. -Alex

    Alex Palamara Jul 21, 2020  #4

  • Hello. I’m in the process of waiting on LTD decision from UNUM. I’ve been off of work since Oct 2019. Used all my STD. LTD was to begin April 2020. They are still “reviewing”. They issued me an initial release of funds covering April/May. Now today I was told they are releasing another payment under Reservation of Rights for May through July while they further review my claim. My health condition is rare. I have unannounced body swells (hereditary angioedema) that frequently require ER. How long can they delay giving determination on my long term?

    Marie Jul 21, 2020  #3

  • Momof7,

    Most insurance companies do not typically ask for Reservation of Rights payments back in the event of a denial. That is not to say that it couldn’t happen though. With respect to continuance of STD payments – those can only ever be made for the maximum period (120 days) – if Liberty has not rendered a decision on the LTD claim by then your husband would not have any rights to additional STD payments. Please feel free to contact our office to discuss your husband’s claim in greater detail.

    Stephen Jessup Aug 29, 2015  #2

  • My husbands STD policy covers the first 120 days at 66% of salary then transfers to the maximum CA EDD weekly rate. Liberty Mutual manages the policy. He was originally told that he would receive the rate until there was a LTD determination. He just received a notice stating they will pay under reservation of rights until the claim determination. If you receive benefits under reservation of rights does the money received have to be paid back if they deny the claim? If so, then can a claimant request to continue to be paid STD until the LTD claim is settled?

    Momof7 Aug 28, 2015  #1

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