Try Our LTD Lump Sum Settlement Calculator To Find Out If You Are Getting A Fair Shake

A long term disability (LTD) company may offer to give you a lump sum of money to buy you out of your policy. In exchange for a lump sum settlement, you agree to forgo monthly benefits and cancel your policy. The lump sum may seem like a lot of money, but is it really a good deal for you?

How an LTD Insurance Company Determines Your Lump Sum Settlement Amount

Present value is an important concept in the world of finance, and it accounts for the fact that the money you receive today is worth more than the money you receive in the future. To illustrate: if you invest $90.91 today at 10% interest compounded annually, you will have $100 in one year. In this simple example, $90.91 is the present value of $100: in other words, a payment of $100 one year from now is worth $90.91 today.

Insurance companies use the concept of present value to calculate your LTD lump sum settlement amount and, as you might expect, they do everything possible to ensure the calculation works in their favor. The calculation is based on a variety of factors including:

  • The value of your policy
  • How long the carrier thinks you will live
  • The number of payments the carrier expects to make

Once the present value of your settlement has been calculated, the LTD insurance company will offer you some percentage of that amount—typically between 50% and 70% of the total value of your claim. It is important to note that these percentages can vary considerably.

Try Our Free Lump Sum Disability Settlement Calculator Right Now

You can use our free lump sum disability settlement calculator to estimate the present value of your claim and get a feel for whether you are getting a good deal.

This calculator does the heavy lifting for you and even considers a cost of living adjustment (COLA) if your policy has one, past monthly benefits and interest owed to you, and attorney fees and costs. If you don’t need those functions, you can just let them default to zero. Once you enter the necessary information, the calculator will provide you with the present value of your policy – taking fees and costs into consideration. If you choose, it will also provide you with a detailed report showing the present value of your future payments – either on your screen or emailed directly to you.


Enter the payment amount you receive each month from your disability insurer.

Enter the number of back payments you are owed by your disability insurer. If your disability payments are current, enter 0.


Enter the interest rate that your long-term disability insurer must pay on the amount of your past monthly benefits. If your disability benefits are current, enter 0.

Enter the number of payments remaining on your policy, starting with your next monthly payment date. Note that many policies end when you reach the age of 65, but you should check your policy carefully to see when yours end. For example, if you have 6 years and 7 months of remaining payments, enter 79.


The discount rate is an interest rate used to calculate the present value of your benefits—the amount you would need to invest today to obtain the full value of your policy in the future. We have defaulted the discount rate to 4%, but you should enter the rate of return you can realistically make on your lump sum payout for the number of months left on your policy.


If your policy contains a Cost of Living Adjustment (COLA) provision to help your benefits keep pace with inflation, enter the COLA rate. If your policy does not contain a COLA, the rate should remain at 0.

Enter the number of months from today that your Cost of Living Adjustment (COLA) increase begins. If it will begin in 5 months, enter a 5 here. If your policy does not contain a COLA, this should remain 0.

Enter the number of years your Cost of Living Adjustment (COLA) increase will be in effect. If you would like the COLA applied to all of your benefit payments or you don’t have a COLA, leave this field as 0.


Enter an estimate of the dollar amount you expect to pay your attorney. This field is optional, so feel free to let it default to 0.


Enter an estimate of the total amount you will be charged by your attorney to cover expenses including the cost to obtain medical records and hire expert witnesses as well as travel expenses, filing fees, depositions, postage, copying costs, and phone calls. This field is optional, so feel free to let it default to 0.

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Call Our Long Term Disability Law Office Before Accepting a Lump Sum Payment

The present value of your claim is just one piece of the puzzle. It is also important to consider a number of other factors including:

  • How eager you are to end negotiations with the insurance company
  • Whether you think you may be able to find work in the future
  • How confident you are in investing the money from your lump sum payment
  • Other personal factors relevant to accepting a lump sum payment

With all of these issues to think about, the decision to accept a lump sum long term disability settlement can be difficult. Not only is it hard to determine if the amount offered by the insurance company is fair, but if you do accept an LTD lump sum settlement offer, the decision is final—you can’t go back to the insurance company and ask for more money. For these reasons, you need to consider your options carefully.

That’s where we come in. Start your research by using our free calculator, and then contact our office for a free consultation with a member of our experienced long term disability legal team. We are happy to review the facts of your case and help you come to a decision that is right for you.

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If you are in need of an attorney that will give you a dedicated, courteous, and professional representation, call us now at (850) 898-9904 or fill out the form on this page for your FREE consultation.
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1,000’s of Successful Cases
Mr. Nick Ortiz is an experienced attorney in Pensacola, Florida. He has handled thousands of successful disability and personal injury cases. Mr. Ortiz has identified the ten most common mistakes that claimants make time and again during the process. He wrote this book to educate consumers about what they can do to avoid making these same mistakes and avoid destroying their own claims.
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Learn how we can determine your case's maximum value. By knowing your case's value, we're able to hold out for every cent that is owed to you... and we won't back down until we get a settlement that is fair to you.