You are interested in putting the inherent stress of a long term disability claim behind you. The insurance company “makes you an offer you can’t refuse” to “buy out” your long term disability claim or policy. Should you take it? Not until you speak to an experienced long term disability attorney.
Before you can evaluate any settlement, you first need to make an informed decision about whether you are first better off continuing to receive monthly benefits. Many group long term disability policies are tied into continued receipt of health, pension and stock benefits. Our office recently represented a woman who was disabled due to a traumatic brain injury. She worked as a top-level executive for a large consumer products company in the Mid-west. She was offered almost one million dollars to “buy out” all her future long term disability benefits.
Unfortunately, the long term disability carrier did not advise her that if she took the “buy out” she would be officially terminated from her company, and lose her most important benefit – her excellent non-contributory health insurance. When she inquired to the long term disability carrier about potential impacts of the buy out on other benefits, she was simply told “we don’t know, but you may want to call your s human resources department”. Based upon her life expectancy, economic situation and medical needs, it was clear a “buy out” of her long term disability benefits in her case would be foolish, and we advised her to decline the offer.
However, in many cases a negotiated “lump sum buy out” can be quite beneficial to the disability client and should be strongly considered. Nevertheless, before you can consider this option, you need to know how much money your case is worth versus how much the insurance company is willing to pay. Different insurance companies will pay different amounts based upon their own economic position and other market factors. Factors to consider in determining the value of your potential buy out include your age, health, life expectancy, mortality, morbidity and a “present value” calculation, using the appropriate “discount rate”, of your future payments. In addition, you may want to consider the inherent stress involved in having a disability insurance carrier constantly harassing you and your doctor if you continue to “stay on claim”. Finally, you may have an employment opportunity you want to consider, but want to “cash out” first. Whatever you’re individual situation, negotiating disability settlements is an “art” as opposed to a simple economic equation. Your attorney’s “relationships” with the large disability insurance companies count. However, your individual needs are always the most important factor.