Many long-term disability claims are resolved through a settlement mediation.

May 24, 2016, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

How will your Long-Term Disability Claim be Resolved?

When you have a claim for  long-term disability benefits,  it is important to be aware of your options and to understand the potential ways your disability claim could be resolved or settled.

One option of course, is to take  your long-term disability claim   to  trial where a Judge will decide.

As part of this process,  you will likely be required to:

• provide extensive medical records and personal information

• attend Examinations For Discovery, where you will answer questions about your disability claim under oath and on the record

• attend before a pre-trial Judgeprior to trial

The  process of taking a long-term disability claim to trial often last years and   can be stressful as well as  financially difficult.    It is also   important to be aware that, even if you are successful,  a trial Judge in a long-term disability case will  only able to award disability benefits up to the date of the trial.  Following the trial however, you will be required to continue to deal with your insurance company.  As a result, there is always  a risk that your  long-term disability benefits could be terminated again at any point after the trial. 

One advantage to proceeding to trial in a long-term disability case,  is the potential  for a Judge to order your insurance company to pay you an amount for aggravated and/or punitive damages.  Simply put, aggravated damages are intended to compensate you for things such as suffering or mental distress, resulting from the actions of your insurance company.  Punitive damages are intended to punish and to deter insurance companies for wrongdoing.   These type of damages are not awarded in all cases.  Any amounts awarded  for aggravated and/or punitive damages however, would be paid to you  in addition to any long-term disability, legal cost or interest amounts ordered by the trial Judge.

Many disability claims are  resolved or settled without  a trial.

One settlement option that may be available to you, is what is typically referred to as a “reinstatement”.  Simply put, this  means that your  insurance company agrees to approve and to pay your  long-term disability benefits up to and including the date of the settlement.  This amount is commonly referred to as the “arrears”.     Often in this scenario, your insurance company will  also agree to pay an additional amount for interest and  to help pay for a portion of  your legal costs. 

In a reinstatement settlement scenario however, there is no guarantee that you will  continue to receive monthly long-term disability benefit payments  after the date of the settlement.   These benefits are often referred to as “futures” or “future benefits”.  Typically,  after the date of the settlement, your insurance company will     simply agree to assess and  determine whether you are entitled to  continue to  receive long-term disability benefits, according to  your policy.   If so, your long-term disability monthly benefit payments will continue.  If not however, your long-term disability monthly benefit payments could be terminated  at any point after the  date of the settlement.

Another long-term disability  settlement option is what is often referred to as a “lump-sum settlement”.  In this scenario, your insurance company agrees to pay you one  total  settlement amount  that includes payment for  long-term disability arrears,  futures, legal costs and interest.  One distinct advantage to this settlement option is that it guarantees you an  amount for long-term disability benefits  beyond any date of settlement or trial.    The settlement amount that is negotiated  however, typically involves long-term disability benefit calculations that are discounted or  reduced   in order to reflect certain factors, including trial risks.  In exchange for a lump-sum settlement, you  will usually be required to sign a full and final release,  ending  your claims for long-term disability benefits.   At the same time, your involvement with your disability  insurer is also brought to an end.    

It  is  very important to carefully discuss and  consider all of your potential  options with an experienced long-term disability lawyer in order to determine which  option is  best for you. 

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

The opinions expressed here, while intended to provide useful information, should not be interpreted as legal recommendations or advice.