Average Settlement for Denied Disability Claims in Alberta
When your disability claim is denied, the financial and emotional impact can be devastating. You've paid premiums for years, your doctor confirms you can't work, yet your insurer refuses to pay.
In Alberta, denied long-term disability (LTD) claims often lead to legal action — and many of these cases end in settlement. But the question most people ask is: "How much is my denied disability claim worth?"
There's no single number, but there are clear patterns. Settlements depend on the value of your unpaid benefits, your future entitlement, and the strength of your medical and legal evidence.
As Alberta disability lawyers who once defended insurance companies, we've seen how insurers calculate — and underpay — denied claims. This article explains what determines settlement value, typical payout ranges, and how to maximize compensation when your disability claim is wrongfully denied.
This guide covers:
What Is a Disability Claim?
Disability insurance replaces lost income when illness or injury prevents you from working. Alberta claimants typically have:
Types of Disability Insurance:
What Determines the Settlement Value of a Denied Disability Claim?
Disability settlements are based on both past owed benefits and future entitlement. Insurers use complex formulas to minimize payout value — but understanding these components helps you negotiate effectively.
Past Benefits Owed
Includes all missed monthly LTD payments since the denial date. May also include interest and CPP disability offsets. Example: If you were denied 18 months ago at $3,000/month, you're owed $54,000 plus interest.
Future Benefits
The largest component of most settlements. Calculated as the present value of all payments owed until age 65, discounted for risk and life expectancy. Example: $3,000/month × 25 years = $900,000 potential lifetime value.
Strength of Medical Evidence
Objective, consistent medical documentation is crucial. Strong specialist reports or Functional Capacity Evaluations (FCEs) can increase settlement value dramatically.
Litigation Risk
Insurers offer higher settlements when they believe your lawyer can win in court. Experienced legal representation and credible experts often double or triple initial offers.
Policy Terms
Some policies cap payments or adjust for cost-of-living and CPP offsets. A lawyer ensures these clauses are applied correctly — not in the insurer's favour.
Bad-Faith or Punitive Damages
If the insurer acted dishonestly, delayed payment, or ignored evidence, Alberta courts may award additional compensation for mental distress or bad-faith conduct.
Steps to Take Immediately After a Denial
If your disability claim has been denied, quick and strategic action is crucial.
Request the Denial Letter in Writing
It must explain the insurer's reasons and reference your policy.
Gather Your Full Claim File
Insurers must provide all documents used in their decision.
Meet With Your Doctor
Ask for an updated report addressing the insurer's stated reasons for denial.
Collect All Treatment and Employment Records
Consistency and detail matter.
Contact an Alberta Disability Lawyer Early
We'll assess the denial, calculate your claim's value, and begin the negotiation process.
How to Maximize Your Settlement Value
You can significantly increase your payout by preparing properly and avoiding common pitfalls.
Strengthen Your Medical Evidence
Get updated specialist reports and functional assessments.
Keep Consistent Treatment
Missed appointments or gaps in care weaken your credibility.
Avoid Insurer Independent Exams
These often favour the insurer; obtain your own expert reports.
Document Everything
Keep copies of correspondence, denial letters, and medical updates.
Hire an Experienced Alberta Disability Lawyer
Insurers offer higher settlements to represented claimants.
Frequently Asked Questions
Conclusion
Denied disability claims can be life-altering — but they're often winnable. With strong medical evidence, strategic legal representation, and persistence, most Alberta claimants recover substantial settlements for unpaid and future benefits.
Settlement value depends on your medical strength, income, and benefit duration
Don't rely on insurer goodwill — they settle when faced with evidence and legal leverage
Always act before Alberta's two-year limitation expires
Seek experienced legal advice early to preserve your rights
Need help calculating or negotiating your settlement?
Call or text us today for a free consultation. No fee unless we win.