The only potential advantage of pursuing an appeal is that, if you succeed, the insurance company will pay the benefits they owe you without the need for you to hire a disability lawyer to represent you. However, statistically, few, if any LTD appeals are successful in persuading the insurance company to change their decision.
There are three major Disadvantages for an LTD appeal:
1. Saving the Insurance Company Money
Before you hire a disability lawyer and pursue your claim in a formal way, all decision-making power remains with the insurance company. While you might be led to believe that your best interests are being considered, the insurance company has a financial incentive not approve your claim. Insurance companies know that many people who have their claim denied will not get a lawyer to represent them, saving the insurance company money and putting them in a position where they can take advantage of the situation. Encouraging a person to appeal allows the insurance company to delay paying you benefits and delay hiring a lawyer to represent them, saving them money.
2. Biased Decision Making
Your appeal is not being considered by a neutral third party. An appeal is usually a process of asking the same adjuster that decided to terminate your benefit in the first place to change their mind. Your appeal can be rejected at any time, simply by the adjuster indicating that they have reviewed their decision and they are not prepared to change their mind, without any negative repercussions or penalties. We all understand that it is difficult to change someone’s mind once it has already been made up. The adjuster that denied your claim has no incentive whatsoever to change their decision to deny your claim.
On the other hand, hiring a disability lawyer to represent you will force the insurance company to hire their own lawyer who will usually provide them with a legal opinion on how strong or weak their denial of the claim is. They are much more likely to be persuaded to change their mind if we can outline the risks for their lawyer of an inappropriate denial of benefits. Pursuing litigation will force them to remove some of the bias from their analysis.
3. Costing you Time, Costing you Money
An internal appeal of your disability benefit denial wastes precious time during which time you are not going to get paid benefits and delay the start of a formal process that might actually accomplish something of value for you.
Insurance companies have been known to encourage people to appeal their denial several times, knowing that delays only benefit the insurance company by allowing them to hold on to their money and not incur the cost of hiring a lawyer. An appeal can take months, or even years, especially if multiple appeals are pursued. During that time, you are expected to patiently wait while the insurance company reviews your claim. In the end, they don’t even need to provide a reason for not changing their mind.
There have been cases of individuals pursuing an appeal that takes them more than 1 or 2 years after the insurance company stopped paying benefits. When that individual ultimately was told that the appeal was unsuccessful and decided to pursue the matter in court, the insurance company sought to dismiss those claims because of the “delay” in the claim being pursued, even though they had been the cause of that delay. In some cases, insurance companies have been successful in dismissing claims that were commenced after the limitation period even though they were conducting an appeal which led to a lot of the delay. Sadly, in those cases claimants lost their legal right to pursue their claims. The insurance company escaped liability and could not be legally forced to pay the benefits because of the delay.
Litigation has its own share of delays because of the backlog in the courts. However, getting the process started sooner rather than later will minimize how much delay you experience and ensure that the insurance company cannot escape liability because of a missed limitation period.