Disability insurance claimants may be entitled to interest if benefits are wrongfully denied
When a disability attorney wins an ERISA claim for his or her client, it is common to ask for pre-judgment interest as part of the appropriate restitution. There is a valid reason for making this request. The disability insurance company prevented the Claimant from receiving their money and as a result the claimant lost interest on the money. Additionally, while the insurance company held back the claimant’s money benefits, the insurance company was investing and receiving interest on the money.
When a disability insurance plan has wrongfully denied benefits, it is reasonable to request pre-judgment interest to fully compensate someone who was a rightful beneficiary of long-term disability benefits and was denied their rights.
Factors Courts Consider when Awarding Pre-judgment Interest for Disability Claims
Whether the Claimant Delayed Filing a Lawsuit
The Court may take into consideration whether the claimant appears to have deliberately waited for as long as possible before filing a lawsuit. This is yet another reason why filing timely appeals and filing an ERISA suit within a reasonable time after final denial of benefits has been issued can work to a claimant’s benefit. When the Court can see that it was the long-term disability insurance plan administrator that was clearly at fault, and the claimant did not delay the progress of the claim, this can work in the claimant’s favor.
Whether the Disability Insurance Company Was Culpable
Not only does culpability impact the Court’s decision on whether to order a disability plan to pay attorney’s fees it also has an impact under ERISA on whether the Court will order a disability plan to pay pre-judgment interest. If a decision was a close one and could be seen as partially supported by the evidence, the Court may find that pre-judgment interest is not justified.
Whether Awarding Pre-Judgment Interest Is Mandated
Prejudgment interest it not mandated under ERISA. It is allowed. It is “a question of fairness, lying within the court’s sound discretion, to be answered by balancing the equities.” (See Shaw v. Int’l Ass’n of Machinists & Aerospace Workers Pension Plan.) When the Court finds that awarding pre-judgment interest balances the equities, then making the award becomes logical.
Guidelines Used to Calculate Pre-judgment Interest for Successful ERISA Claims
While there have been some District Court decisions that have upheld using state statues for calculating the appropriate interest rate for specific interest claims, in general an effective argument must be presented to the Court to justify doing so. In the case of Sherri Kay Smith v. American International Life Assurance Co. of New York, the Court recognized that federal courts often look to state law for guidance when ERISA is silent, as it is on pre-interest judgment. In this case heard in 1995, the Court used a state statute to establish a rate of 18% per annum.
States have a variety of methods for calculating pre-judgment interest, so in the effort to secure uniformity under the Employee Retirement Income Security Act (ERISA), the Courts have developed specific guidelines. Since Blankenship v. Liberty Life Assurance Co. of Boston, District Courts have found that the interest rate prescribed under 28 U.S.C. § 1961 for post-judgment interest is also an appropriate guide for pre-judgment interest.
Section 28 U.S.C. § 1961 establishes a precedent where post judgment interest is calculated at a rate equal to the weekly average 1-year constant maturity Treasury yield.” The Court uses the rate published by the Board of Governors of the Federal Reserve System during the calendar week that proceeds the date of the judgment.”
In Nelson v. EG & G Energy Measurements Group, Inc., the court found that calculating the pre-judgment interest rate based on the average 52-week Treasury bill rate operative immediately prior to the date judgment made the most sense, as this would compensate adequately based upon actual market values during the time benefits were withheld.
The Court may then decide that the best method for calculating the pre-judgment interest involves calculating interest as though the plaintiff had invested the money, rather than spending it, at the 52-week Treasury bill rate. Then the Court calculates what would happen if the compound interest was reinvested annually at this same rate. This could enable the Court to establish a fair level of compensation for pre-judgment interest. The problem with a court relying on the 1 year constant maturity yield is that it is less than 1%, which is much different than most state judgment interest rates which exceed 6%. Courts have the discretion to choose a reasonable interest rate. In most of our cases we will consult with an accounting expert to advise the court on reasonable interest rates that should be used.
Importance of Asking for Pre-judgment Interest
It is vital that a disability attorney not overlook the value of making a request for pre-judgment interest as part of the lawsuit. It isn’t enough to move for summary judgment. Courts can issue summary judgment and not award pre-judgment interest.
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Disability Company Reviews
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Lincoln Financial
Uses every dirty trick in the book
It’s next to impossible to get $ out of them without a lawyer. They use plenty of intimidation and unfair tactics. They don’t want to pay. And yet, their CEO made 13 m... read more >
Unum
Unum is evil
On 11/3/2021 I got shot by my boyfriend and my spinalcord got hit, paralyzing me from the neck down and accepting Unum benefits was the worst decision I ever made. I sued ... read more >
Lincoln Financial
Every month I get paid on a different date
I will start by saying that my experience is not as horrible as others, like the folks who have valid claims but get nothing from Lincoln. I feel for you and hope to god y... read more >
MetLife
They will do anything to not approve your claim
MetLife’s handling of my short-term disability claim has been incredibly frustrating and stressful. I followed all the necessary steps prior to my surgery, providing the... read more >
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Sedgwick
Don't trust them, they like to play games
They suck the life out of people that need help. They falsely advertise for helping people that they care. Sorry to tell you it's all about money, they do not care for any... read more >
New York Life
Lyme Disease Disability Claim Denial
I have had repeat claims for genuine medical leave and they have repeatedly been denied by NY Life. I have even been diagnosed with Lyme and going through treatments and t... read more >
New York Life
Disappointed with NY Life Disability Excuses
I am beyond disappointed with NY Life Disability Insurance’s handling of my father’s claim. My father, a 66-year-old man who has suffered two strokes and continues to ... read more >
New York Life
New York Life is a joke!
This company sucks when it comes to disability claims. They are slow at processing stuff, then they always say they didn't recieve the doctors information. You spend your ... read more >
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Seven Surgeries and The Standard Still Denies Disability Insurance Benefits
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5 Ways We Help Get Your Benefits Paid
Get Your Disability Application Approved
Our goal is to get your application for disability insurance benefits approved. Applying for disability insurance benefits can be a difficult process and the information you provide is critical. Most disability insurance companies look at your application in hopes of finding a reason to deny your claim. Your disability company will ask you to complete numerous forms, interview you, request lots of information, speak with your doctors and possibly request to have you examined by their hired gun doctor.
Through our experience of having helped thousands of disability insurance claimants, our disability insurance lawyers will guide you through the entire application process and give you the best chance to get your disability claim approved the first time.
Submit A Strong Appeal Package
If your disability insurance benefits have been wrongfully denied, then our disability insurance lawyers know exactly what it takes to get your disability claim approved. You only get once chance to submit an Appeal, therefore every piece of evidence that will support your disability claim must be included. The goal is to win your disability benefits at the Appeal level, but while preparing your Appeal you must consider how a federal judge will review your disability claim if your benefit denial is upheld.
Preparing a strong disability appeal package is an art that requires you to understand how the courts interpret your disability policy language, ERISA regulations / laws, and how to strategically present evidence in support of your definition of disability. We encourage you to contact any of our long-term disability attorneys for a free immediate review of your disability denial.
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We have recovered hundreds of millions of dollars for our clients and we would like the opportunity to provide you with a free review of your disability benefit denial. There are many complex factors in a disability benefit lawsuit and the legal battle to win long term disability benefits can be fierce.
Prevent A Disability Benefit Denial
Approval of long-term disability is a continuous process as every disability insurance company will evaluate your eligibility for benefits on a monthly basis. You can never let your guard down and assume that your disability company will continue to pay your benefits for as long as you think you need them.
Our disability insurance law firm offers a reasonable flat fee monthly claim handling service in which we handle every aspect of your long-term disability claim and do whatever it takes to make sure you are paid every month.
Negotiate a Lump-Sum Settlement
Let's discuss if a lump-sum settlement or buyout of your disability insurance claim is both available and makes financial sense for you. Our disability insurance lawyers have negotiated more than five-hundred million dollars in disability insurance buyouts and we know how to get you a maximum settlement. A disability insurance company is not required to offer a buyout and not every disability company offers them.
Questions About Hiring Us
Who are Dell Disability Lawyers?
We are disability insurance attorneys that know how to get your short or long term disability benefits paid. As a nationwide law firm we have helped thousands of disability insurance claimants throughout the United States to collect hundreds of millions of dollars of disability insurance benefits from every major disability insurance company.
Our attorneys have been able to either get our clients paid monthly disability benefits or obtain a one-time lump-sum settlement in more than 98% of our cases. Our disability insurance lawyers have seen it all when it comes to disability insurance claims and we know exactly what it takes for your disability claim to be approved.
We offer disability insurance attorney representation nationwide and we welcome you to contact any of our LTD lawyers for a free immediate review of your disability claim. We also invite you to visit and subscribe to our YouTube channel where we have more than 900 videos and regularly provide tips to help protect your disability benefits.
Who do you help?
Our disability insurance attorneys help individuals that have either purchased a long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer. We have helped individuals in almost every type of occupation with monthly disability benefit payments ranging from $1,500 to $50,000.
Our clients include all types of employees ranging from retail associates, sales representatives, government employees, police officers, teachers, janitors, nurses, pilots, truck drivers, financial advisors, doctors, dentists, veterinarians, lawyers, consultants, IT professionals, engineers, professional athletes, business owners, and high level executives.
A strong understanding and presentation of the duties of your occupation is essential for securing disability insurance benefits.
Do you work in my state?
Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability insurance lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.
What are your fees?
Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.
The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.
In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.
Do I have to come to your office to work with your law firm?
No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via phone, email, fax, or video conferencing sessions. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.
How can I contact you?
When you call us during normal business hours you will immediately speak with a disability insurance attorney. We can be reached at 800-698-9159 or by email. Lawyers and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.