How are Plaintiffs in Long Term Disability Settlements Offered Benefits?

Often clients want to know the entire procedure of long-term disability settlement cases. To put it in other words, they indirectly want to know how much do plaintiffs in long term disability cases get paid. 

• Did they pay a huge amount? 

• Will the client continue to receive a fixed monthly amount for life? 

• Do they charge extra charges for pain, suffering, mental distress, or punitive damages caused? 

• Is the client required to clear the settlement amount taxes? If yes, what’s the amount? 

All the above-mentioned questions are legit and valid because long disability cases can get settled out of the courtroom in various ways. 

Different insurance policies define disability differently. In case, the plaintiff fails doesn’t meet the disability criteria which is mentioned in the long-term policy, there’s a high chance that the insurance agency might reject any award if asked.  Hire an advocate from Pace law and have a detailed discussion before requesting for a long term disability settlement to your insurer. 

The definition of disability under most policies is ” the plaintiff is sick/ injured that he/she cannot perform his/her daily duties of her/ his first two years. After two years, the definition usually changes.” It is then defined as the plaintiff cannot carry out the daily obligations of his/her occupation corresponding to their training, education, or experience. You must be wondering what does “any occupation” indicate. If you can perform the job you are trained to perform and also have the required education and experience, then you won’t qualify for disability. The availability of work is irrelevant. The availability of jobs for you isn’t considered in this case. This is what is called the period of “any occupation”. 

If your case has been taken to the court for trial, the judge will command the insurer to pay the benefits that are included in your long term disability policy. The judge can further order the insurance agency to pay your awards monthly known as “reinstatement of benefits”. 

The jury head also carries the power to order the insurance provider to pay damages for causing mental distress or aggravated damages to the party. However, there is hardly any case where courts order the insurers to do so. If only the court sees harsh or egregious behaviour from the company’s side, it orders the company to pay additional charges. Under no circumstances can the judge order the insurer to provide the plaintiff with her/ his arrears and an additional amount equivalent to 15 years of benefits at the same time. 

What would happen if the plaintiff resumes his work within a year?

Not under any of these circumstances is the insurer obligated to pay the benefits of long term disability to the plaintiff. That’s not the purpose of providing long term benefits to the party. 

Additionally, your victory at the trial doesn’t confirm your success in the long run. Firstly, insurance agencies have plenty of resources and it won’t be financially constraining for them to re-try for the cases they have lost. When the case would be reconsidered at their appeal, you might lose, you could also win. The judge may call for reconsideration or retrial of the entire case altogether. If that’s what happens, you are again back to where you started from. Again, supposing that the insurance company doesn’t appeal for its lost case and has accepted to court’s order to pay you the long term benefits you owe. In that case, the insurance company can conduct surveillance on you. If not, then they can also send their doctors to investigate if any of the benefits are liable to be terminated. If they get successful at it, you will again be back to square one, fighting for your long term benefits in court against the insurance company. 

Now, a long term disability case can be sorted out of the court in various ways. Let’s see how. 

The insurance company agrees to pay the arrears to the plaintiff and reinstate his / her long term benefits. This assures plaintiffs. In case, if the insurer doesn’t try to terminate the terms of any of the benefits, it means that they will get benefits for the entire duration as stated in the policy. Usually, insurance companies provide benefits for up to 65 years of age. However, this age limit may vary accordingly. For some plaintiffs, the settlement isn’t reliable, because it makes them dependent on the insurer and they believe the insurer might mistreat them at any point. It makes them tied to the insurer despite their bad behaviors and therefore, they feel being looked down upon. 

This type of case can be solved in another way as well. For instance, when both the plaintiff and the insurer agree to a huge amount being paid, which includes future benefits and arrears. In this type of settlement, the plaintiff doesn’t have to stay dependent on the insurer. In case, both parties didn’t sign any particular agreement, the plaintiff is free to do whatever she/he wishes to. The only thing to be kept in mind is that the one-time lump-sum payout should be sufficient enough to provide financial security to the plaintiff up to the age of 65. 

Also, remember that the arrears can be taxed, but future benefits cannot. So the settlement must be prepared in a way where the benefits are stated as future benefits, to minimize the plaintiff’s tax burden. 

In all cases of long term disability settlements, the plaintiff tries to seek as many benefits as possible. The defendant on the other hand will try to pay as low as possible. These cases are hence settled considering a lot of different factors and circumstances. That’s why a thorough understanding of the long term disability case settlement procedure and its benefits is essential to structure the best settlement for you.