We have seen an uptick in calls from individuals facing a concerning situation: Sun Life Insurance has deemed them no longer disabled and is planning to terminate their long term disability benefits. But before they terminate benefits, they offer a lump sum settlement, also known as a buy-out, for a small amount of money. Essentially, Sun Life is offering to pay a lump sum amount of money to buy out your claim early, thus ending your monthly benefit and coverage under the disability insurance policy. If you’re in this situation, understanding your options and rights is essential.
Why Are Disability Benefits Terminated?
Insurance companies like Sun Life periodically review disability claims to determine whether claimants continue to meet the criteria for disability. These reviews may involve:
- Requests for updated medical records.
- Surveillance or monitoring to evaluate your activities.
- Independent medical examinations (IMEs) conducted by physicians hired by the insurance company.
If Sun Life decides you no longer meet the LTD policy’s definition of disability, they may terminate your LTD benefits. Unfortunately, these decisions are not always fair or accurate and usually come without warning. Insurance companies often rely on incomplete or biased information to justify terminating claims.
Beware of Low Settlement Offers
In some cases, Sun Life, or other insurers, may offer a one-time lump sum payment as an alternative to continuing your disability benefits. While a lump sum payment might sound appealing, it’s often significantly less than the total value of your claim. For example, if your benefits are payable through age 65 or 66, the lump sum might pale in comparison to the amount you would receive over the remaining years of your claim.
While not all lump sum settlement offers are low or unreasonable, if it is being offered before the insurance company terminates your benefits, chances are it is an unfair offer. It’s crucial to carefully evaluate such offers before accepting them. Insurance companies frequently calculate these settlements based on their interests rather than providing you with fair compensation. This is where experienced legal guidance can make a significant difference.
Steps to Take if Your Benefits Are Terminated or You Receive a Low Settlement Offer
Understand the Reason for Termination
Review the letter from Sun Life explaining why your benefits are being terminated. This document will outline their reasoning and provide insight into how you can challenge their decision.
Gather Supporting Evidence
Compile all relevant medical records, including recent doctor’s notes, test results, and treatment plans. If you’ve received a low settlement offer, calculate the net present value of your benefits, including any applicable offsets such as SSDI benefits, through the policy’s end date to assess whether the offer is fair.
Contact a Disability Insurance Attorney
Navigating a benefits termination or settlement offer can be overwhelming, especially if you’re also dealing with the stress of a disability. An attorney with expertise in disability insurance law can:
- Challenge Sun Life’s decision to terminate your benefits.
- Negotiate a fair settlement if a lump sum payment is on the table.
- Represent you in litigation if necessary.
Don’t Accept the First Offer
Remember, the first settlement offer from an insurance company is rarely the best offer. By consulting with a long-term disability attorney experienced in handling lump sum settlement negotiations, you can ensure that you’re receiving a fair settlement of your claim.
If you’ve received a letter from Sun Life advising you that it is terminating your disability benefits or offering a low settlement, you need to act quickly. There are deadlines by which you have to respond and failure to do so will negatively impact your claim. Keep in mind, insurance companies rely on claimants being uninformed or unprepared to push back on their decision or offer. With an experience long term disability insurance attorney on your side, you can protect your rights and secure the benefits you deserve.
Lawyers Specializing in Disability Insurance Claims
Because disability insurance law is complicated, it is important to get legal help from a lawyer who focuses on disability law.
As a law firm built to focus on disability insurance, our lawyers specialize in disability insurance. We spend every day working to get our clients long term disability benefits approved.
Because federal law applies to most disability insurance claims, we do not have to be located in your state to help.
If your claim for long term disability benefits was denied or being delayed by an insurance company, call us to speak with a disability insurance attorney.
We represent clients across the country with:
- Submitting a disability insurance claim;
- Appealing a long-term disability denial;
- Negotiating a lump-sum settlement; or
- Filing a lawsuit against your long term disability insurance company.