Long Term Disability Law Blog
Sun Life Disability operates throughout the U.S. and almost exclusively provides group long term disability (LTD) insurance policies. These group policies are usually purchased by employers on their employees’ behalf, and are governed by the Employee Retirement Income Security Act (ERISA). If Sun Life denies a claimant’s claim for long term disability insurance benefits, the claimant must pursue an administrative appeal before filing a lawsuit—and even a lawsuit against your insurance carrier may not look like the cases you see in the movies. Learn more about the unique laws and regulations governing ERISA claims and what disability claimants can expect from their Sun Life Disability lawsuit.
Sun Life Has a Uniquely Detailed Approach to Denials
Many insurance carriers tend to deny disability claims in a cursory way, providing a generic-sounding explanation in the brief denial-of-benefits letter. But Sun Life is a smaller company that does less of a volume business than many of the largest long term disability insurance carriers. As a result, it tends to provide much longer, more detailed disability insurance denial letters that may reject a claimant’s disability application for multiple reasons.
This can be a double-edged sword; while having such a detailed disability denial letter can increase the amount of defense a claimant will need to play, it can also provide a roadmap of what the claimant will need to prove (or rebut) to win their lawsuit.
A Sun Life ERISA Lawsuit Will Be Litigated in Federal Court
ERISA is a federal law, which means that disability insurance lawsuits against Sun Life can be filed in just about any federal court in the country. Sun Life is a Canadian company operating in the U.S., and many claimants decide to sue Sun Life in the district closest to their home.
Just like the level of detail in Sun Life’s disability denial letters, the ERISA jurisdictional issue can sometimes be a double-edged sword. On one hand, because the federal courts will apply a uniform standard in deciding your disability claim, it can be easier to anticipate what type of evidence the court will look for in making its decision. On the other hand, ERISA lawsuits don’t allow for punitive damages, which can reduce the overall value of a disability claim.
Claimants Must Meet the “Arbitrary and Capricious” Standard
In order to prevail in a Sun Life disability lawsuit (or any other ERISA lawsuit), claimants will need to show two things:
- They are disabled according to the policy’s definition(s) of disability; and
- Sun Life’s denial was not founded on any legitimate reason, but instead was “arbitrary and capricious.”
This second prong can be tough to meet. Claimants may be able to prove arbitrary or capricious behavior by showing, for example, that the Sun Life representative didn’t review certain medical evidence or documents in making their decision, mixed up two file numbers, mis-stated the evidence, or denied the claim because of their personal bias.
Sun Life Settles Many Disability Claims With a Lump Sum Buyout
Litigation can be risky for both sides, and the old adage, “a bird in the hand is worth two in the bush” has never rung more true. Sun Life will often settle its ERISA claims with a lump sum buyout of the policy instead of taking the matter to court. In most cases, Sun Life will pay anywhere from 25 percent to 75 percent of the present value of future payments in order to close the case and move on.
If you need some help with a Sun Life disability claim or just want to learn more about your options, set up a FREE consultation with a member of our nationwide network of long term disability insurance attorneys today.