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Should I Consider a Lump-Sum Buyout?

construction workerIn cases of long-term disability insurance claims, there are numerous options for injured workers. One thing that may be offered to injured workers is a lump-sum buyout. In exchange, the worker would essentially forfeit the insurance policy and the monthly payments that come with it. Before you consider a lump-sum buyout, here are some factors you should know.

Why Insurance Companies Offer Buyouts

There are a number of reasons an insurance company may offer a buyout and there are considerations in place in order to calculate the amount they want to pay. First, the insurance company will determine the length of the disability policy during which they may need to make payments. Second, they’ll try to estimate the lifespan of the recipient of the payments and whether or not they would surpass the maximum benefit period.

Finally, the insurance company would determine the value of the policy and calculate the lump-sum buyout amount. At the end of the day, it is the goal of the insurance company to minimize the amount of money they pay out to injured workers. If a lump-sum buyout accomplishes this goal, they’ll most likely make an offer to the policyholder.

As an injured worker, there are some factors that you may consider as benefits for accepting a lump-sum buyout. First, after dealing with the disability insurance company for so long, you may be tired of going through the process. There are many obstacles to overcome when seeking long-term disability insurance benefits, but some may accept the buyout just to avoid those issues.

Secondly, many feel as though accepting a buyout is a bit of a security blanket for their family. For instance, when someone is receiving disability insurance payments and the recipient passes away, the payments do not continue to go to the decedent’s family. They would just stop. With a lump-sum buyout, the policyholder can feel a bit more peace of mind that money may go to their family should something happen to them.

At Dabdoub Law Firm, our disability insurance attorneys understand what a difficult decision it is to make whether or not to accept a lump-sum buyout. We’re here to help if our clients need assistance with the insurance disability benefits claim process.

Contact us today to get started.