Should I Accept a Lump-Sum Settlement Offer by My Disability Insurance Company?
The short answer is it depends.
In some cases the insurance company may offer to buy-out your claim. This means they are going to pay you up front a portion of the remaining value of your claim. It is important to keep in mind that you will not receive the full value of your case. This is often done in cases where there is no chance the claimant will improve.
A buyout can be a good option for someone who wants to move on with their life, without the hassle of the insurance company. Once on claim for a disability, the insurance company will likely check-in at least once a year, if not more frequently. They will ask for updated forms and medical records. They may even request an in-person interview or conduct surveillance without notifying you. Essentially, the insurance company will always be looking in on you and your disability so long as you are on claim.
A buyout releases you and the insurance company from any further obligations. You will no longer have to answer to the insurance company or provide any update information. If your insurance company is a source of stress, a buy-out may be a good option for you.
If your insurance carrier contacts you with a buyout offer there are a couple things to keep in mind:
- Can you afford to take less than the full value of your claim?
- Do you have other benefits from your former employer that are contingent on your receiving disability insurance benefits?
- Will you have to pay any taxes on the lump sum payment?
Deciding on, and negotiating a fair amount for a lump sum buyout can be stressful and complicated. It is a good idea to consult an attorney for guidance. You want to be sure you are getting a fair deal.
As a law firm created to focus on disability insurance, we have fought all major disability insurance companies and have won several major disability lawsuits.
All our lawyers commit every day of their legal career with helping people get disability benefits from UNUM, MetLife, Prudential, Northwestern Mutual, CIGNA, and other insurance companies.
Because federal law applies to most disability insurance claims, we do not have to be located in your state to help. We help clients nationwide.
Call to get experienced disability lawyers on your side with:
- submitting a disability insurance claim;
- appealing a long-term disability denial;
- negotiating a lump-sum settlement; or
- filing a lawsuit against your disability insurance company.