Individual Long Term Disability Claims

individual disability insurance attorney for LTD denials and appealsFlorida Disability Insurance Lawyer For Individual Long Term Disability Insurance Claims (Non-ERISA)

Individual Disability Insurance is an insurance policy that you purchase outside of your employer directly from an insurance agent or broker. This is completely different coverage than one may receive as a group benefit from an employer (even if you pay for all of the premium through the employer).

Individual Disability Insurance (“IDI”) policies are issued insurance companies that specialize in disability claims, such as Paul Revere, MassMutual, CIGNA, Lincoln Financial or MetLife.

Benefits of an IDI Policy Compared to a Group Policy

Many people prefer to purchase group coverage because Individual Disability Insurance policies are much more expensive to buy than the Group LTD policies that employers may offer. However, the coverage provided by individual policies tends to be much better than the coverage under group policies, and the protections afforded if the insurance company denies an application are much better with Individual Disability plans than with Group LTD plans.

If you file for long-term disability benefits under an individual disability policy, the claim and internal administrative appeal process are similar to the claim and review process for a group policy. However, IDI policies are still advantageous to group policies for many reasons, including the following:

  • IDI policies usually do not have offsets for “other income”, such as income from Social Security Disability benefits (offset clauses reduce the monthly cash benefit amount an LTD insurer owes when the insured receives income from other specified sources);
  • IDI policies are governed by state contract law, whereas most Group LTD policies are governed by federal ERISA regulations;
  • IDI policies provide “own occupation” coverage throughout the entire benefit period, whereas most group policies only provide “own occupation” coverage for the first two years of the benefit period;
  • Most IDI policies do not distinguish between physical disabilities and mental disabilities, whereas most group plans only provide two years of LTD coverage for most mental health claims; and
  • in general, IDI policies tend to have far fewer limitations on benefits than Group LTD policies.

Most Important Difference from Group Plans: State v Federal Law

When an insurance company denies or terminates an Individual Disability Insurance claim, the insurer is subject to state law, and can be sued for breach of contract and bad faith. The playing field is also more fair to the disabled worker under state law because the claimant has a right to testify and present evidence to have a jury decide whether he or she is disabled, as disability is defined in the disability insurance policy. In particularly egregious situations, the insurance company may be liable for punitive damages and/or the attorney fees of the claimant. Group disability claims are governed by ERISA, the federal law that governs all employer-supplied disability insurance.  ERISA does not allow for many of the aforementioned advantages and remedies available under state law. In an ERISA claim, the claimant cannot bring a “bad faith” claim and the right to a jury trial is taken away. Moreover, the claimant cannot testify or introduce any new evidence at a bench trial before a federal judge. In an ERISA claim, the claimant is only able to collect the disability benefits owed and may try to recover damages to cover attorney’s fees, interests and court-related costs.

In short, the Federal laws that govern ERISA group claims are far more favorable to the insurance company.

About the Ortiz Law Firm

Attorney Nick A. Ortiz has years of experience in handling Individual Disability Insurance claims, appeals and lawsuits. Mr. Ortiz represents individual disability insurance claimants in Pensacola and throughout the state of Florida. As stated above, if you purchased an individual disability insurance policy, your claim will be governed by Florida state law, and you have many more options than those filing for group plan benefits under ERISA. Mr. Ortiz is licensed to practice in all state and federal courts in the state of Florida, and he has experience in suing disability insurance companies to obtain the benefits his clients deserve. Mr. Ortiz will help guide you throughout the appeal process, from the application through the appeal stage, and will file a lawsuit in court, if necessary. Mr. Ortiz will work to have you put back on claim, where you receive your past-due benefits and ongoing monthly payments, or help you receive a lump-sum settlement from the insurance company.

Mr. Ortiz does offer free initial consultations to those whose benefits have been denied or terminated.  Contact us by phone or online by using the form on our Contact page for a free case evaluation.