Sometimes a long-term disability carrier will send you a letter offering to pay you a lump-sum, better known as lump-sum buyout offers. A lump-sum buyout means that instead of receiving monthly payments, you will be given a one-time payment equal to the number of months they planned to pay in one check. This might sound like a great idea- you get a large check, and the insurance company doesn’t have to worry about monthly payments. But a lump-sum buyout comes with advantages and disadvantages.
For the purposes of this article, we’re going to separate out long-term disability buyout offers and long-term disability settlement offers. Buyout offers are made by the insurance company while you are receiving long-term disability benefits. Buyout offers are different from settlement offers, which occur when you’ve been completely denied benefits and you’re trying to negotiate a settlement with the insurance company either right before or after filing a lawsuit.
If you have been offered a lump-sum buyout payment, we understand that most claimants are tempted to accept a quick cash payment because they are suffering financially as a result of their disabilities, but you should decide whether or not to settle very carefully. The insurance company will be estimating what your disability is worth from the company’s point of view. There is a chance they could undervalue your claim.
We have created a calculator you can use to determine the value of your claim and get a feel for whether you are getting a good deal. The calculator does the heavy lifting for you and will even take into account a cost of living adjustment (COLA) if your policy has one, past monthly benefits and interest owed to you, and attorney fees and costs. Once you enter your information, the calculator will provide you with the present value of your policy, and you can even download a detailed report showing the present value of your future payments.
How Do Disability Attorneys Help with Lump-Sum Buyout Offers?
If you are already receiving benefits, you may be wondering why you would consult with an attorney. Before accepting a lump-sum buyout offer you should understand your legal rights, the value of your claim, and what it will take to fight back against a low-ball offer from the disability insurance company. An experienced Long Term Disability Insurance attorney can help you evaluate factors such as:
- The present value of your claim;
- Cost of living;
- Mortality rate; and
Don’t Let an Insurance Company or Another Individual Deny You the Security and Success You Deserve
The insurance company may want you to make a quick decision, but take some time to review all your options first. A lump-sum buyout will be a final agreement between you and the insurance company. Making sure that the lump-sum buyout will meet your needs throughout your life is the most important thing to remember when negotiating with the insurance company.
If you’d like to speak to a Long-Term Disability Insurance attorney about your lump-sum buyout offer, contact us at (888) 321-8131 or contact us online to schedule a consultation. We can help you evaluate whether the offer is fair and how to move forward with the process.