Beware of Sun Life low-ball offers. Sun Life is well known for contacting their claimants during a review and extending buyout offers accompanied by a threat that benefits will be denied if the claimant does not take the offer. These offers are common around the change in definition review where the definition of disability changes from own occupation to any occupation. Often, clients are contacted by Sun Life in the midst of an appeal review and told that the appeal will be denied but Sun Life is willing to pay a small lump sum of money if the claimant agrees to sign a settlement release whereby the claimant releases Sun Life of any liability for future benefits. The claimant will waive any rights he/she has on the policy.
There are situations in which an early settlement could work out to benefit a claimant; however, it is important to understand that Sun Life is not extending a buyout offer to you because it is to your benefit. If Sun Life extends a settlement offer it is because they have determined it to be in THEIR best interest to do a buyout at this early stage of the claim.
If you have received a threat of denial from Sun Life in the form of a buyout offer you should immediately contact a Sun Life disability buyout attorney to review your options. Experienced attorneys can review your case and determine if your claim can be salvaged and what needs to be done to prevent a denial of benefits. Alternatively, The DI Lawyer can guide you on your best options and help you determine if taking a buyout offer is to your benefit at any stage.
If you receive a call from Sun Life or a letter with an offer to settle your claim with a 7-day expiration date do not waste any time and contact a lawyer immediately. The right disability attorney will be familiar with Sun Life’s tactics and how to deal with them. Unlike most other insurance companies that offer buyouts, Sun Life will extend buyouts at almost any stage of the claim. Their settlement offers will always require you to sign a settlement release requiring you to surrender all future benefits.
Do not sign a release without legal representation
A properly executed release is nearly impossible to escape if you change your mind at a later date. Getting out of a release would require money and a lot of work and insurance companies have lots of experience in drafting releases in the best way possible to protect them. You do not want to be in a position where you regret signing the release and struggling to find a lawyer who will fight the insurance company on your behalf. Most lawyers will decline to take on a case where a properly executed settlement release exists. The bottom line is, do not sign a release without first consulting with an experienced attorney.
This does not mean that you should never accept a buyout offer from Sun Life as there are many cases where it can work out in your favor. But if Sun Life’s offer is tied to a threat that they will terminate your claim then you should be suspicious of the offer and you should take immediate steps to review your options with experienced professionals.
A threat of claim termination can come at any stage including within the first 2 years while the claim appears to be going smoothly, during an appeal review following a claim denial, and even after all appeals have been denied but before a lawsuit has been filed.
Sun Life Settlement offers during an appeal review are common. They typically come toward the end of the review period after Sun Life has generated evidence to support a denial of the appeal but before they have rendered an official decision. Sun Life provides group disability coverage typically through an employer. As a result, most of these claims will be governed by the Employee Retirement Income Security Act (ERISA). It is important to understand how an ERISA appeal works and why they should be carefully handled. The reason you see low ball settlement offers at this stage is because Sun Life knows that the law will favor them once the appeal is denied.
The first step following an ERISA governed Sun Life Long Term Disability (LTD) denial is to start working on an well-crafted appeal. Many claimants decide to handle an ERISA appeal on their own without first speaking with an ERISA attorney. This is a mistake. ERISA is very strict when it comes to LTD claims and an appeal should not be taken lightly.
The basics of an ERISA governed Sun Life LTD Appeal:
If Sun Life does not complete the appeal review within the 90-day maximum period, the ERISA appeal requirement can be “deemed exhausted.” Normally, you cannot file a lawsuit against Sun Life until you have exhausted all required appeals on your claim. So, you have to wait until Sun Life makes a decision, unless they blow the deadline, in which case, your appeals can be deemed exhausted and you can file a lawsuit immediately.
Sun Life likes to drag its feet
However, there are certain situations where Sun Life is allowed to go beyond the 90 days; such as where Sun Life is waiting on additional information, for medical examinations, or anything else that’s considered necessary for the review. When this happens, Sun Life can “toll” the clock on the review.
I have seen many cases where Sun Life abused the tolling and dragged the review well beyond the required timeframe. Sun Life often uses this extra time to request other independent medical examinations or peer reviews of the medical records. Often, where a claimant is unrepresented by a lawyer, Sun Life will reach out to the claimant and inform them that a review uncovered evidence that supports a denial of the appeal but that they will make a “generous” settlement offer that the claimant can accept now or take their chances with the appeal.
Many people take the offer and sign the release. The best way to avoid all this is to get an experienced attorney involved as soon as your claim is denied. But, even if you find yourself in this position where it feels too late, you should immediately contact an ERISA attorney.
The DI Lawyer has handled countless cases against Sun Life and is very familiar with their tactics.
Sun Life settlement offers can come at any stage of the claim, including after benefits have been terminated and all appeals have been exhausted. Sun Life has been known to extend settlement offers in exchange for a release where the claimant agrees not to file a lawsuit against them.
Even at this stage, it is not too late to contact an attorney.
ERISA lawsuits require specialized knowledge and familiarity with the federal court system. In making a settlement offer, Sun Life will weigh their risk of losing against you at trial. Rarely, will they give you a fair settlement offer at this stage, especially if you are unrepresented. Do not sign a release without adequate legal representation. A good Sun Life settlement attorney can help you decide if the offer is reasonable and if the offer should be rejected.
No new evidence after appeals are denied
Once an appeal is denied on an ERISA governed claim, the administrative record is closed—meaning that no additional evidence to support disability can be submitted. A lawsuit will consist of a judge reviewing only the evidence in the administrative record and listening to arguments from the attorneys on both sides. You will not be able to testify in court, your doctors will not be able to testify as witnesses, and no new tests or evidence of your disability can be introduced to the judge. Even if your condition significantly worsens after the appeal is denied, this evidence cannot be considered by a judge.
The insurance company friendly standard of review
To make things even harder for the claimant, the scrutiny that a judge employs in most of these cases is called an “arbitrary and capricious” standard of review, which will favor Sun Life. If the policy is not subject to a discretionary ban in the governing jurisdiction, then chances are, the policy contains a discretionary clause which will give Sun Life discretionary authority to make decisions on claims and interpret the terms of the policy. The resulting standard puts the burden on the claimant to prove his/her disability at trial, using only the evidence in the administrative record, and then convincing the judge that Sun Life’s decision was not based on a reasonable basis. Each circuit has its own variation of this unfair standard and each state has its own rules regarding discretionary authority in disability policies.
You do not want to be in a situation where you are litigating against Sun Life under this unfair standard. The best way to avoid this is to get an experienced lawyer involved as early as possible.
Not all buyout offers from Sun Life are unfair and, ultimately, the fairness of an offer depends on your unique financial situation. If you have not received a settlement offer from Sun Life but you would like to avoid dealing with ongoing medical reviews and rid yourself of the anxiety caused by your fear that your claim will be cut off, then settling your claim could be an option for you.
Avoid volunteering too much information too early
You could contact Sun Life on your own, but you should be cautious in how you approach them. You should avoid disclosing too much information and remember that they may be suspicious of your request. The mere request could signal red flags to Sun Life that something is not right. They may think that you are interested in working. A seemingly simple conversation could lead to you disclosing information about your interest in starting your own business. This could lead Sun Life to perform a medical review and possibly surveillance to gauge your activity level. Surveillance videos and reports can be easily skewed one way to mis-characterize your actual activity level and once Sun Life denies a claim based on surveillance it’s almost impossible to get them to overturn the denial.
Before approaching Sun Life, you need to make sure your claim is ready for a buyout. Your medical records should be in order. Your doctor should be ready to respond with the right answers. You should be prepared to respond with the right answers. You also want the right team of professionals who can guide you and tell you if it’s even a good idea to ask before you risk the review.