A federal court in Michigan has recently ruled on this issue.  It said that while there is no right to prejudgment interest under ERISA the court does not need a finding of wrongdoing by the defendant insurance company in order to award prejudgment interest.  The court need only find that benefits were incorrectly withheld.  Thus it is within the court's discretion to decide whether to award prejudgment interest and at what rate.

Long-term disability tip:  When an insurance company wrongfully denies your long-term disability benefits and then later offers to pay those benefits they will generally not include past-due interest.  They know that in order to get past-due interest you will have to court and that is expensive.  Congress should change the ERISA long-term disability laws to mandate that an insurance company which denies your claim but later agrees to pay your claim should pay past-due interest and your attorney fees

Ben Glass
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Ben Glass is a nationally recognized Virginia injury, medical malpractice, and long-term disability attorney
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