Many of our Long Term Disability clients want to know how long term disability cases settle. By this question, what they are really asking is how do they as the client, get paid.
Is it a lump sum payment?
Is it a monthly benefit that the client will receive for the rest of their life?
Are there additional damages for pain, suffering, punitive damages, or damages for mental distress?
Does the client have to pay any tax on the settlement amount? If so, then how much?
All of these are valid questions because there are so many ways which a long term disability settlement can be structured outside of Court.
For starters, in order to achieve any sort of award in a long term disability case, the Plaintiff needs to be disabled. This seems so simple, but for so many clients, it’s hard to understand.
Granted; each policy of insurance carries a different definition of disability. But at the end of the day, if the Plaintiff does not meet the definition of disability under the long term policy, there is a very good chance that the insurance company won’t want to pay out any award.
Under most policies, the definition of disability is loosely defined as over the first two years, the Plaintiff is so injured/sick that s/he cannot perform the regular duties of his/her “own occupation“. This first two years is commonly known as the “own occupation” or “own occ” period.
After the first two years, the definition of disability generally changes to the Plaintiff cannot perform the regular duties of “any occupation” commensurate with their education, training and experience. The availability of work is irrelevant. It doesn’t matter that there aren’t any jobs out there for you. If you can do any job for which you have the education, training and experience, then you won’t meet the test for disability. This is commonly known as the “any occupation” period.
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