Some people receive long-term disability insurance coverage as a benefit of their employment. Others buy private policies of their own to protect them and dependent family members in the event of a medical emergency.
Long-term disability coverage helps you pay your bills when you can no longer work because of a medical issue. Private insurance is a crucial supplement to Social Security Disability Insurance, which offers benefits that are far too low for the average family to survive on, especially if they have children.
It can be a long wait to get SSDI benefits, and those coping with a recent medical issue often have a lot of expenses to cover. Although it may seem tempting to settle your long-term disability claim quickly to get a check in hand as soon as possible, there is a big risk that you take when you accept a settlement.
You lose the right to make a future claim
You may think that your current financial circumstances are stressful, but you need to keep an eye on the bigger picture when considering your insurance coverage. It is common practice for insurance companies to offer low settlements at first.
Some settlement offers are so low that they constitute bad faith insurance practices because they would not reasonably cover the expenses someone has incurred and are all so far below what the policy should pay. However, insurance companies will offer those low settlements because they save money when people don’t claim the full benefits they have a right to based on the terms of their policy.
Once someone signs settlement paperwork or cashes a settlement check, the insurance company gets to wash its hands of future financial responsibility to that policyholder. Even if you have tens of thousands of dollars more in costs than you would have guessed in the first months after settling your claim, it would be an uphill battle to seek more coverage after you accept a settlement. You would have to prove that the insurance company acted in bad faith to have a chance of connecting with more compensation.
Good settlements require negotiation
Securing an appropriate and reasonable settlement based on the impact of your disabling medical condition and the amount of coverage that you have requires negotiation. When the insurance company first offers you a settlement, you can review it, determine what would be a more reasonable amount, and respond with a counteroffer.
This process can take months to complete and can be difficult for an injured person to manage on their own. Understanding what your claim is worth and committing to getting enough compensation can protect you when you need to make a long-term disability insurance claim.