Lump Sum Policy Buyouts
Being on long-term disability can be a lifesaver to those that suffer a loss in income when they become disabled. But working with monthly payments from an insurance company and proving a disability and inability to work through paperwork can be grueling for many people. Insurance companies may exploit this feeling by offering people a large sum of money so they can discontinue paying their monthly benefits. They will want to pay only a percentage of the full amount they would pay had it been paid through a lifetime. Getting an attorney could be the difference between getting a dismal payout and getting more than you thought you could ask for from the insurance company. Their specialized knowledge would be helpful in the case of a lump sum policy buyout.
What is a Lump Sum Policy Buyout?
When someone receives disability benefits for an extended period, the insurer may find it more financially reasonable to pay the future benefits in a lump sum. This means the claimant would receive the rest of the disability benefits from the insurer all at once. It might be less than the total policy had it been paid out as usual, but there are upsides to accepting a lump sum offer.
If you accept the policy buyout, you will first agree on a settlement price with the insurer. You will have to sign documents to that effect, including signing away your right to future payments from your disability claim. Once the settlement is finalized, you will no longer receive monthly payments, and the insurance company will award you one final payment to cover present and future payments from the plan. Remember that if your claim has an aggregate limit, it will not apply to the claim.
An attorney is vital to getting the lump sum payout that clients are due. The insurance company’s goal of offering lump sums to claimants is always to save money in some form. The payout will look like a lot of money, but it will amount to less than you would receive with continued monthly payments. A lawyer can help get a bigger payout from the company while working with you to understand your needs and the case itself. If you want to maximize your payout and reduce the amount of work asked of you, hire an attorney to handle your case.
Should I Do a Lump Sum Policy Buyout?
Usually, there are two reasons why an insurance company would want to offer someone a lump sum buyout:
- Someone has been receiving monthly benefits for a long time, and the insurance company expects them to live to the end of the benefits, so they decide it would be cheaper to pay a large sum once rather than offer continued payments.
- Someone files a lawsuit after an appeal, so the company may offer to settle in a lump sum anytime during the litigation or after the claimant wins the case. Many factors may make it easier to offer a settlement, like saving on litigation costs and other damages that need to be paid or to leverage power when the claimant wants to avoid a lengthy appeals process in the federal court system.
You might want to accept the buyout from the insurance company for many reasons. It simplifies your case and cuts ties between you and the insurance company, which is the goal for many people. Some reasons to accept a policy buyout are:
- Peace of mind. You won’t need to worry about losing benefits, proving your disability, or contracting with the insurance company or your employer.
- To invest in your future. You may want to pay off accumulated debts or open a business to support yourself and your family. Maybe you want to save for retirement, get new training/education to further your learning process, or start in a new field that accommodates you.
Whatever your reason for wanting to accept the lump sum, you should consider the amount they are offering compared to the amount you would get for continuing the monthly payments. An attorney can help you determine what you are entitled to.
Contact Us for Help with Your Policy Buyout!
A lump sum payout may be exactly what you need at this point in life. But don’t forget to fully consider what it entails for the present and your future as someone with a disability. Accepting it when offered may seem advantageous, but it may not be the best choice. Read over the policy to understand where you fit into it, and consider contacting an attorney to determine your full benefit options. They will know the entire process and the practices of various insurance companies. This inside knowledge is priceless when you realize how much more money you could get from hiring them. Contact our team to get help winning the money you deserve today!