Long Term Disability Law Blog
What can you expect when you file a Principal Financial Group disability lawsuit, what does the litigation process look like, and what do you stand to win? If you have exhausted all of your long-term disability benefit appeals, a lawsuit may be the next course of action. Our disability insurance attorneys have extensive experience dealing with Principal Financial lawsuits, and we want to share some tips and advice on what you should expect if a disability benefit denial lawsuit needs to be filed.
Keep in mind that there are differences in litigation when it comes to group and individual policies, and you will need to take several factors into consideration before making a decision to file a lawsuit. The length of the lawsuit process, what happens if you lose, the possibilities to appeal without filing a lawsuit, and what a disability lawyer can do for you are all important things to know before you decide on the next steps.
In the video above and the article below, attorneys Rachel Alters and Gregory Dell share advice on what to expect from a Principal Financial Group disability lawsuit.
What are the differences between a group policy vs individual policy with Principal Financial?
When it comes to the litigation process, there are several key differences between a private disability policy and group disability policy.
A Group disability policy is governed by ERISA (Employee Retirement Income Security Act), which is a federal law with its own regulations. Because of this, you do not get a jury trial with an ERISA claim. For litigation purposes with a group policy, you will only have a bench trial with a judge where there are no witnesses, no depositions, and no testimony. The judge will simply look at the administrative record, which is the claim file, and decide whether or not the insurance carrier was arbitrary or capricious in the denial of the claim.
If the judge finds that the insurance carrier was arbitrary or capricious, then they rule in favor of the claimant. The claimant can recover past benefits that they’re owed, possibly get attorneys’ fees, and then the claim gets sent back to Principal for another review to determine future benefits.
If you have an individual policy, you get a jury trial of your peers, you can take depositions, and there’s testimony. In other words, you don’t have to rely solely on the administrative record, and the administrative record doesn’t close at the time of the last decision.
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When you have an individual policy, there are more options and benefits at your disposal, such as bad faith or punitive damages. Of course, a private policy is probably five to six times the price of monthly premiums than a group policy, but people who have group policies may not have necessarily bought an individual policy or even knew they could buy one.
How long does a Principal Financial disability denial lawsuit take?
First of all, you need to make sure that the lawsuit is filed in a timely manner because there’s something called the statute of limitations, which means there is a deadline on when you can file the lawsuit. Depending on the contract and state, it’s three years from the date of proof of loss; sometimes, however, it’s only one year, so your attorney needs to pay close attention to the statute of limitations because if that gets blown, you don’t have a claim anymore.
Once the lawsuit is filed, it depends on the court. If it’s a federal court, it usually takes about a year to get to trial; sometimes, it’s shorter, but expect about twelve months. Once the judge enters a scheduling order, there will be a mediation that’s required by law, and as a claimant, you will be required to show up for mediation to attempt to settle the claim.
If that’s not successful, expect to wait for a judge’s review or to go to trial. Once again, that will depend on whether you have a group or individual policy: if it’s individual policy, there will be a trial. If it’s group policy, then it’s usually just the lawyers’ motions (the plaintiff’s lawyer versus the defendant’s lawyer’s motions), the judge’s review, and the decision.
If you win a long term disability benefit lawsuit, what do you get?
A lot of people have a misconception about what they get if they win the trial.
Unless there are punitive damages involved, usually, whether it’s a group or a private policy, you are awarded past disability benefits. The judge is never allowed to award future benefits regardless of which policy you have.
If you win your case, you get whatever you’re owed to date or to the date the lawsuit was filed. Anything in the future is determined by the insurance carrier once it’s remanded back to them to decide if you’re still disabled and deserve benefits. This means that even if you win the lawsuit, your future benefits will depend on another review from Principal, and if they decide that you’re not disabled, you’re back to doing the same thing again: appealing the denial and going back to trial a year later. Unfortunately, that’s how it works, and you cannot be awarded future benefits by court.
How are Principal Financial lawsuits usually resolved?
Usually, around 95% – 97% of lawsuits end in a lump sum settlement. This is because most people don’t want to be in that vicious cycle we just mentioned: you win the trial, get your past benefits, your claim gets reviewed by Principal again, and if the claim is denied, you’re back appealing or filing another lawsuit. It’s a very tedious process, so most of the time, people prefer getting a lump sum settlement and moving on with their lives.
What are the benefits of getting a Principal Financial lump sum settlement?
Most disability lawsuits, whether it’s against Principal Financial or any other insurance company, end up in lump sum settlements because for the insurance companies, there is always a chance of losing, and they prefer to settle instead. For the claimant, the lump sum settlement is usually a high value because it offers a level of certainty and, since a lot of claimants don’t have any income coming in because they’re unable to work, it’s a win.
Another strong reason for a Principal Financial lump sum settlement is that people can move on. Often, despite their disability, people want to work or find different solutions on their own, but their insurance policy simply won’t allow them to do it. It’s almost like being on house arrest: even though you can leave the house and try finding new opportunities, the policy is keeping you locked in. When you get a lump sum settlement, however, you’re free to do as you please: you can start a new job the next day or try something you’ve wanted to do without worrying that the insurance company will be monitoring you; and, you have several years worth of benefits prepaid for you. It sometimes gives people a spark or an incentive to try to do something, as opposed to living in fear every day that Principal is going to cut them off and no longer pay them. This is definitely one of the strengths of taking a settlement in a lawsuit.
If you lose the Principal disability lawsuit, what does the appeal process look like?
If you lose in federal court, that means you’re not getting your benefits. If the judge finds that Principal was not arbitrary and capricious in the denial of your claim, that they had a reasonable basis to deny or claim, you are not getting anything.
You can appeal to the next level of court; unfortunately, the process can take an additional year or more. Once you do actually go to that trial, it takes a very long time for the appellate court to make a decision. If that decision does not satisfy you either, there is another level you can appeal, but it’s very costly, and most people don’t want to go through that. It’s a very challenging process: unless you have some reserves or family support to ride out that ordeal, you may struggle to pay your mortgage or other expenses, and we see a lot of disability carriers strong arm claimants into settlements.
How does our law firm charge for a lawsuit against Principal Financial?
Our disability lawyers charge on a contingency basis, that is, we get paid if and only if we recover the benefits for the claimant. In other words, as a claimant, you have no risk hiring a disability lawyer because if they don’t win, you don’t have to pay anything. Because of this, there is a big incentive for your lawyer to win the lawsuit or get a good settlement.
Here at Dell Disability Lawyers, when clients hire us, there is no risk for them whatsoever: we cover all the costs and we continue to manage the claim on an ongoing basis if we win the lawsuit and they get back on claims, which is also a substantial advantage.
Ideally, if your claim has been denied by Principal, it’s best to review a copy of your denial letter and a copy of the policy. We have to really dig into the claim, get a complete copy of the claim file – which could be 500 to 15,000 pages – and take a good look at what’s there. If you need help, we provide you with an initial free phone consultation, and within a matter of 15 – 20 minutes, we’re going to be able to tell you if we can help you, what it’s going to cost you, and how long will it take. During a free initial call with our firm, you’ll find out everything that you need to know, regardless of where in the country you’re located – we work nationwide.
If you’re looking for additional information, we encourage you to watch some of the other videos on our YouTube channel and look through our website with lots of articles on different topics from disability claims and appeals to lawsuits.
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