Filing a long-term disability insurance (LTD) claim can be a complicated undertaking, involving hours of medical appointments and often substantial fees for copies of medical records. When the review process for an LTD claim is lengthy, a disabled person’s frustrations may rapidly compound. If the claim receives an initial denial, the frustration may become even more intense. All of these factors can make negotiating with long-term disability insurance attractive if the company offers to settle the case. With your future on the line, however, implementing effective LTD policy negotiation strategies can make an enormous difference in your future. Following a thorough negotiating LTD insurance terms guide may give you a deeper understanding of how to negotiate with long-term disability providers to achieve a fair settlement that aligns with your personal priorities and needs.
Can You Settle With Long-Term Disability?
An insurance settlement in a long-term disability case typically comes about as a result of the appeals process after a denied LTD claim. The disabled person, or sometimes an attorney with whom they choose to work, employs LTD policy negotiation strategies in an attempt to resolve a dispute over the legitimacy of the long-term disability claim. Ideally, negotiating LTD insurance terms guides the insurance provider and the individual who has filed a claim toward a mutually satisfactory solution.
How To Negotiate With an Insurance Company for Pain and Suffering?
In some respects, the settlements in these cases of denied long-term disability insurance claims are similar to those that often resolve personal injury lawsuits. Both types of settlements aim to limit expenses for the insurance provider and shorten the delay the person filing the claim experiences in receiving much-needed funds. Unlike personal injury settlements, however, LTD policy negotiation strategies do not necessarily imply any liability. Also unlike the settlements reached in some personal injury cases, lump-sum settlements for long-term disability claims are not generally based on the calculation of either economic damages, such as costs associated with the delayed benefits, or non-economic damages, such as pain and suffering.
Negotiating With Long-Term Disability Insurance: What Does a Settlement Cover?
The payments individuals may reach after negotiating with long-term disability insurance providers are not considered compensation for harms done, but simply a fulfillment of the insurance company’s obligations toward the policyholder. This underlying legal philosophy can be helpful to keep in mind when considering how to negotiate with long-term disability providers.
What Is a Lump-Sum Settlement for Long-Term Disability?
The outcome of successfully implementing a negotiating LTD insurance terms guide is generally a one-time payment known as a “lump-sum” settlement because it “lumps” together a rough approximation of what would otherwise be the amounts of many individual payments, into a single sum. The benefit of this type of one-time payment for insurance companies is that it essentially eliminates any ongoing administrative overhead associated with the claim. Depending on how the duration of payments is structured under the policy terms, a lump-sum settlement may also save the insurance provider on total costs compared to monthly payments over the maximum benefit period for the policy.
For the disabled person, on the other hand, negotiating with long-term disability insurance providers to achieve a lump-sum settlement can mean guaranteed funds in the near term, compared to the continued stress and uncertainty of repeatedly appealing a denied long-term disability claim. Particularly for individuals who have high medical expenses in the first year or two of their disability, the need to ensure access to funds sooner rather than later can play an important role in LTD policy negotiation strategies.
Negotiating LTD Insurance Terms: Guide to Understanding the Other Side
Insurance companies are businesses. They take in money in the form of premiums, and they pay out money in the form of benefits. Although they do tend to use various investment strategies to enhance the revenue they receive from premiums, the expense side of their balance sheets will necessarily include the usual costs associated with office space, equipment, and employee salaries, in addition to the benefits paid to policyholders. Like other businesses, these companies need to maximize their revenue and minimize their expenses in order to maintain a consistent profit margin. Keeping this perspective in mind can make it easier to effectively strategize how to negotiate with long-term disability providers.
How To Negotiate With Long-Term Disability Providers: Identifying Personal Priorities
Many of the life experiences associated with becoming disabled in what may have been the midst of a successful career are not as simple as a cost-benefit analysis. Instead, personal priorities are often determined on a relative basis, by the way an individual’s own circumstances are positioned in terms of a few key factors that tend to influence LTD policy negotiation strategies from both sides of the table. Some of the factors you may need to consider include:
- Your personal life expectancy
- The maximum duration of benefits under your policy terms
- Your immediate financial needs
- The availability of income sources other than disability benefits
- Whether you have dependents
- The number of years between your current age and the age at which you would have expected to retire
These factors can have a sometimes complicated interplay, in which one variable can alter the relative importance of two or more others.
What Is the Longest You Can Be on Long-Term Disability? Duration of Benefits vs. Personal Life Expectancy
If the duration of benefits under your current policy terms is less than your personal life expectancy, then this factor may weigh in favor of accepting a lump-sum settlement sooner, rather than later. On the other hand, if your benefits for an approved claim would normally continue until your retirement age, then you may have a strong incentive to negotiate aggressively for a larger settlement, in order to account for the total you would be eligible to receive if benefits were paid steadily over a longer period of time.
Negotiating With Long-Term Disability Insurance: Evaluating the Gap Between Current Age and Retirement Age
The gap between your current age and potential retirement age, which will most often be defined as the age at which you become eligible for Social Security retirement benefits, may also play a role in determining how to negotiate with long-term disability providers in your particular case. When the duration of your potential benefits under an approved claim runs to retirement then you have a stronger incentive for negotiating for a larger lump-sum settlement. Limited benefit periods, or onerous renewal requirements, can tilt LTD policy negotiation strategies in the other direction.
Negotiating LTD Insurance Terms: Guide to Providing for Financial Dependents
Individuals who have financial dependents, such as minor children, may have an additional incentive to negotiate for a lump-sum settlement that will provide financial stability for their families, not just their own futures. A thorough analysis of the policy terms is especially important here, since occasionally LTD policies include options for survivor benefits. Under policy terms that do not provide those benefits to surviving dependents, a family may be left with no source of income if the disabled person dies during the benefit period. Consider speaking with an attorney experienced in how to negotiate with long-term disability providers to review your policy terms and evaluate whether your LTD policy negotiation strategies can be tailored to provide financial security for the loved ones you may someday leave behind.
LTD Policy Negotiation Strategies: Accounting for Immediate Needs vs. Alternate Sources of Income
Most of the factors individuals will want to consider in negotiating with long-term disability insurance providers are also shared, from the opposite perspective, by the insurance companies themselves. However, financial dependents, immediate financial needs, and the availability of alternate income sources are concerns that pertain solely to the disabled person pursuing a claim. Often these three considerations can intersect. The more pressing your immediate financial needs are, the more attractive it can be to achieve a resolution to your claim sooner, rather than later. On the other hand, the greater the availability of alternate sources of income, such as a spouse’s salary, the more leisure you may have for continuing the appeals process.
Knowing the Policy and Preparing the Documentation: Setting Yourself Up for Successful LTD Policy Negotiation Strategies
No matter how refined your LTD policy negotiation strategies may be, or how well you understand the factors involved for each side, you will likely struggle to achieve a fair settlement without extensive documentation. As a rule, the kinds of evidence you will need in negotiating with long-term disability insurance providers to settle your case are similar to those you would need to continue pursuing appeals. Thorough documentation of all medical appointments, written statements from the physicians who have been involved in your care, and your own notes regarding symptoms and adherence to prescribed treatment regimens may all be useful to bring to the table. Be sure you know the terms of your specific policy inside and out, and let the evidence you present in negotiating LTD insurance terms guide the other side of the table toward the conclusions that your claim has a strong chance of approval and that your prognosis could easily see you receiving payments for the maximum benefit period. Throughout the process, seek out advice and perspective from experts who know how to negotiate with long-term disability providers and can give you the benefit of their experience.
