Sun Life Disability provides group long term disability policies to U.S.-based customers – and, like just about all disability insurance carriers, denies a fair number of claims for benefits. But because Sun Life isn’t necessarily one of the biggest names in disability insurance, claimants who are seeking (or considering seeking) benefits from Sun Life may feel like they’re in the dark. Is Sun Life a fair company to deal with? What do they look for when approving or denying a claim? Learn more about what can happen if Sun Life denies your claim for disability benefits, as well as how you can appeal this disability denial or even file a lawsuit.

Hi, I’m Greg Dell, with attorneys Dell & Shaefer, and I’m here with Attorney Alex Palamara, and we’re going to talk about disability insurance lawsuits against the Sun Life Disability Insurance Company. And Alex, as you know, Sun Life is a Canadian-based company. However, they do a decent amount of short-term and long-term disability insurance benefits in the United States. It’s almost exclusively group, employer-provided, ERISA-governed, long-term disability insurance policy.

So the lawsuits that we’re going to talk about are those that are governed ERISA. This is after a claimant has exhausted their appeal. And I know you’ve handled tons of Sun Life disability claims. And I want to initially get your view on how Sun Life is compared to the other disability companies out there, in terms of, first of all, do you see him within the top 10 largest companies, and then their demeanor and attitude towards claims?

ALEX PALAMARA: Well, they are not one of the top 10. Or they might be in the top 10, but they’re not the ones that we sue the most, to be honest with you. We don’t get a lot of people calling us about Sun Life group disability insurance denials. But we do see them a fair share amount of times, because they do deny a lot of people.

You know, I actually get a lot of phone calls where someone says, I’m dealing with this insurance company, or I’m dealing with that insurance company, I read online that they’re the worst. But truth be told, they’re all pretty much one and the same, where they’re all pretty much denying a lot of the claims that they get their way.

Sun Life usually writes a long denial letter relying on their own hired medical experts

GREGORY DELL: I find Sun Life to be unique in their approach to claims, because of their internal structure. In my opinion, they write one of the most in-depth denial letters of any of the disability insurance companies. When, for example, compare them to a Cigna– how many pages is your common Cigna denial letter?

ALEX PALAMARA: Three, maybe four.

GREGORY DELL: Right. With half the page being the address, their logo, and then the other half being their block line. Whereas– and what do you usually get on a Sun Life denial?

ALEX PALAMARA: Eight to nine.

GREGORY DELL: OK. So significant difference. And a lot of it is not necessarily form information. So you know, where Cigna is like, let’s do the bare minimum and deny the claim and then do more later. I feel that Sun Life actually digs in a lot more, obviously, in the beginning and really tries to make it where their appeal is not going to be their go-to catch-all, but they’re going to try to front-load it up front and do a review on the claim. Has that been your experience?

ALEX PALAMARA: Of course. They don’t do a bad job of denying the claims. They seem to do a better job of denying the claims. They actually make it a little bit more difficult to win the lawsuits against Sun Life, as versus other insurance companies that we have previously mentioned. And yet the longer the denial letter, sometimes I say to myself, the harder is to win a potential lawsuit. So when I see a long denial letter, I kind of sometimes get a little bit fearful. But then once you get into most cases, you can find ways around what they’ve done.

GREGORY DELL: Yeah, it’s not so much the length of the denial, whereas, you know, just to say Cigna, but like they’ll say, well, the restrictions and limitations aren’t supported by your medical complaints. And then it’s like, well, what are you relying upon? Whereas, Sun Life tends to– is better trained, doesn’t have as high a volume, and will tend to lay out the medical issues now. It could be 15 pages long, because our client has had treatment for two years and they have extensive medical records and as all they did–

ALEX PALAMARA: Is a summary of the medical records.

GREGORY DELL: Right– was hire their in-house nurse to create a medical summary, and they regurgitated that. And you’re reading it and going, oh this person is definitely disabled. Well, then you get to the conclusion, which could be the same conclusion we see in all their denial letters, you know basically says–

ALEX PALAMARA: Same paragraphs.

GREGORY DELL: Yeah. You know, your symptoms don’t match the objective findings, or you have a limitation, or we don’t feel that it raises to the level of limiting you from working. You know, the typical type stuff. So the detail and the length doesn’t necessarily make it any better, but they do look into it. Now, the other thing is their in-house resources. Do you find they go more in-house or outhouse? And when I say outhouse, can you clarify what that means?

ALEX PALAMARA: Well regarding outhouse, you’re talking they hire quote unquote, independent physician reviewers, to conduct a review of the medical records. Or maybe they send something to independent medical examination. You know, some insurance companies do a better job of going independent and going outside, so that’s not their own employees conducting reviews of the claims.

Some insurance companies just rely on their own employees, which I consider to be very biased people. Because if they find for the claimant, they’re kind of going against their employer and making their employer potentially spend thousands upon thousands of dollars per month, for you know, for years on end.

GREGORY DELL: Right. And that’s the person who’s paying their paycheck.

ALEX PALAMARA: Exactly.

GREGORY DELL: So I mean, that’s kind of the whole fallacy in the ERISA system, is hey, we denied you. Guess what? You have to appeal. Who do you appeal to? The same company.

ALEX PALAMARA: Right.

A Sun Life disability denial must be filed in Federal Court

GREGORY DELL: The same people who are employed– they’re the payor and the decision maker and then they get to make that decision and is supposed to be fair and impartial, which oftentimes unfortunately it’s not. When you finally get done with this appeal and then you file this lawsuit, all these are filed in federal court. Can you explain why it has to be in federal court, and why we can pretty much put these cases in just about any court in the country?

ALEX PALAMARA: Well, they’re federal laws. The Employee Retirement Income Security Act are federal laws that govern these group disability insurance policies, most of the group disability insurance policies. So you’re forced to file it in federal court. Now, there’s a lot of case law out there that essentially states, you can file these lawsuits wherever the insurance company is actively engaged in doing business. And the great majority of all the insurance companies are actually engaged in all 50 states, if not every single jurisdiction throughout the 50 states. I can assure you that they’re all practicing down here in the Southern District of Florida, where we file the great majority of our lawsuits. And maybe sometimes it’s favorable to file in a different jurisdiction. For the most part, we can file them all down here.

GREGORY DELL: Yeah, and we file all over the country based upon the law that’s going to be best for the claimant, whether it’s– I mean, wherever. We’ve done California, Hawaii– I mean basically every state, almost, we’ve filed in. And there’s some we want to stay away from, because there’s just not a pro-claimant type circuit. So we’ll discuss that with you when you give us a call, based upon the different locations that are available. But that’s not a major factor. The fact is, you’re in federal court, you’re getting a review by a judge.

Now in ERISA, most of these policies have a discretionary clause. However, there are some states that don’t have discretionary clauses. Can explain the difference and why, if there is a discretionary clause, that it makes it more challenging for a claimant to win their long-term disability claim?

“Discretionary Clauses” in Sun Life disability policies are terrible and unfair for claimants

ALEX PALAMARA: Discretionary clauses are the worst thing possible on your disability insurance policy. When there’s a discretionary clause, it essentially states that the insurance company has discretion to interpret the plan documents and to award or deny the benefits up to their discretion. Essentially, whatever they want to do, they can do. Now, if this discretionary clause is in your policy, it does two things. It changes the standard of review that the federal judge utilizes in determining who should win the lawsuit. Now if there’s no discretionary language or discretionary paragraph in your policy, the judge will review the case de novo. Essentially, the judge gets a review all the information and make his or her own decision whether he or she believes the person is disabled.

If there is a discretionary policy, the judge then has to first perform with a de nova review. If the judge finds that you are disabled, then the judge has to go to kind of a second step and make a determination whether he or she believes that the decision by the insurance company was arbitrary and capricious.

This is a much higher standard to satisfy in any case. So a de novo versus arbitrary and capricious– you want a de novo standard review. But if your policy– and most of the policy nowadays contain this discretionary clause, we have to prove that the decision by the insurance company denying your case was arbitrary and capricious, which is which is pretty tough to do, but we get the job done.

GREGORY DELL: How strongly does Sun Life believe in their position when you’re litigating versus you know, say, some of the other companies?

ALEX PALAMARA: Well, I can tell you that I’ve never had a case against Sun Life where re-litigating with them and they say, you know what? We’re wrong. Let’s put the person back on claim. It’s never happened to me. I’m sure it’s happened in the past, but my personal lawsuits, it’s never happened yet.

GREGORY DELL: Whereas, we have had that happen periodically with other carriers. So they kind of have a very high belief in their people, or whatever it is, and just say we’re going to live and die by this decision, regardless of what the outcome is, has been my strategy.

And what are the common resolutions of a claim of a lawsuit that somebody could expect?

ALEX PALAMARA: Well, the great majority of any lawsuit– whether it’s a disability insurance claim, whether it’s a car accident claim, a slip and fall, or even, you know, a criminal lawsuit, you know, when people are charged criminally, it’s also a lawsuit– most lawsuits end in settlements, no matter what law is governing these claims. Just because a settlement gives, you know, there is uncertainty in any lawsuit, and a settlement will give every single side’s certainty.

You know, when you come to a settlement, you know what you’re getting at the end of the day. You know, the old bird in the hand versus two in the bush thing. Letting a judge decide, especially when there’s a discretionary clause, can be very tricky because the law is against you, number one, and number two, you don’t know which way this federal judge might actually go.

They can be a very conservative judge where they basically find for the insurance company all day, everyday, no matter what. Or they can be more on the liberal side, and maybe look further into the case, and maybe see that there’s medical documentation that the insurance company ignored, or they overlooked, or maybe that they find an issue with the reviews that were conducted by the insurance company. But most cases end up in a settlement for that reason, because you don’t know which way a judge may or may not go in deciding any case.

The value of a Sun Life denied claim in litigation varies based on multiple factors

GREGORY DELL: I want to talk about what a settlement means, and what someone could expect. And people may say, well, what’s my case worth? Well, first of all, there’s so many factors that go into what it’s worth because of the fact first of all, how much is your monthly benefit amount, what type of definition of disability do you have, what jurisdiction are you in, are we dealing with de novo, or are we dealing with arbitrary and capricious, like you just said, do we have any limitations in the policy that are going to limit the benefit pay period time? How old are you? How much time is left? So there’s lots of factors.

Then it gets into what’s the quality of review that they did on the appeal– not just the initial claim, but what did they do on the appeal versus what is the information that you submitted as the claimant. Now, if we handled your appeal, obviously, we know and we’re in a much better position because we helped to shape that appeal. But if we didn’t do your appeal, we have to get the claim file and review everything that not only you did on your appeal or a different lawyer that you may have had, but also, what did the disability insurance company Sun Life do on the appeal in their review to see if they acted arbitrary and capricious, or just do they have good evidence to support their claim?

And you know, that’s the art of what we do when we’re evaluating the claim. But the reality is is that the vast majority, as you said, of these claims end in lump sum settlements. And the valuation that people want to know is that look, if this was undisputed, and sometimes Sun Life does buyouts, you’re looking at 75% of the present value of the future payments.

ALEX PALAMARA: Right.

GREGORY DELL: And if it’s a disputed claim, you’re looking at anywhere from 20% to 50%, because of the fact that Sun Life can pay their lawyer $50 grand, $100 grand, defend the case. And if the upside is $500 grand, that you could possibly get as payments, and they only have to pay their lawyer 10% or 20% of that, and there’s no bad faith, no penalties, you know, maybe there’s going to be attorneys fees that they have to pay, then there’s no risk to them to spend $50 or $100 grand, if they can avoid paying $500 grand.

So that’s very often why you see settlements in these cases, because then they make an offer where if their case is worth $500 and they offer you $250, it may not make sense to roll the dice if your back’s against the wall to try to double your money, when you have a level of certainty.

So there’s cases we tell claimants, we absolutely think you should settle. And there’s cases where we say, under no circumstances should you settle. But you’re the boss, the client. Right? You make that final decision. All we can do is give the advice. And the claimant should know that we have the tools and the skill and everything else necessary in the experience to fight for you, however we can. And that’s what we want you to understand.

So if you have a claim that’s been denied, feel free to give myself, Alex, any of our attorneys a call. We help clients all over the country. We make it a very easy process where we provide you an initial free consultation. All we ask you to do is send us a copy of your denial letter, send us a copy of your policy. We’ll get on the phone with you immediately. You’re not going to speak to a paralegal or secretary, you’re going to get on the phone with a lawyer.

We’re going to let you know straight away if we think we can help you. Right away, we’ll give you a fee proposal as to what we think would be a reasonable fee for your case. We always charge a percentage of the past and the future benefits. The percentages range every time because the benefits range. That’s another thing that we’re going to let you know right away upfront. There’s no fees or costs, unless we win. So feel free to reach out to us and Alex and myself, we look forward to the opportunity to speak with you.

We hope this has helped shed some light on how Sun Life disability insurance  claims tend to proceed and provided you with some action items to discuss with your attorney. At Dell & Schaefer, we focus exclusively on disability insurance claims, providing us with the expertise to gather and seek relevant medical documentation, negotiate with your long term disability insurance carrier, and guide your case to a resolution. Get in touch with one of our nationwide network of experienced disability attorneys to schedule your FREE consultation today.