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The answer to this question depends on the type of long-term disability insurance contract you have. Most employees have disability insurance coverage through a group plan with a private-sector employer. If your employer is large enough, or if you obtained your policy through an employee organization or union, then ERISA rules and regulations come into play.
When You Can Sue
According to ERISA, you must “exhaust” your administrative remedies before filing a lawsuit. This means you must follow the insurance policy terms and go through each step of the appeals process directly with the insurance company. Most insurance policies only allow claimants to file one appeal, but some may offer an optional appeal, so you should review your policy carefully.
FREE RESOURCE: Appeal a Long-Term Disability Denial with our LTD Appeal Guide
When You May Not Have to File an Appeal
There may be other situations where you do not have to file an appeal before filing a lawsuit. Generally, you do not need to appeal if you have an individual policy purchased directly from an insurance agent or broker or if your policy is sponsored by a government or church employer directly (in other words, if the policy is not through a union or employee organization). In such situations, you may be entitled to file a lawsuit after your first denial.
How Long Do I Have to File a Long-Term Disability Lawsuit?
If your LTD policy does not mention a specific time limit to file a legal action (lawsuit), then the time limit is the same as that for a breach of contract claim in your state. However, most LTD policies have a specific deadline for filing a legal action. This particular language is usually towards the back of an LTD policy. Typical deadlines range from 1 to 3 years, but I have seen a deadline as short as six months.
Can an Insured Sue for Future Policy Benefits and Attorney Fees?
An insurance company cannot be mandated to pay all future benefits. As for attorney’s fees, it depends on the type of claim.
Schedule a Free Long-Term Disability Case Review
You may have questions about whether you are required to file an appeal or whether you should participate in the optional appeal process. If you have such questions, you should immediately seek legal advice from an attorney familiar with ERISA disability cases like Nick Ortiz. Please call (888) 321-8131 to schedule a free case evaluation with the Ortiz Law Firm.