In the video above, disability attorney Marc Whitehead discusses the importance of negotiating disability settlement offers. When we explain how disability insurance companies often try to settle claims far below their actual worth, the value of negotiations becomes clear.
Our attorneys often work with people whose long term disability claims have been approved, yet they have been offered disability settlements that are not fair amounts.
Analyzing the value of your LTD settlement should be a priority. You’re bargaining with an insurer who in all likelihood wants to lowball their payments. We want to make sure you maximize your settlement.
Maximizing your claim’s worth is just one example of how a skilled disability lawyer in your corner can make a big difference in the outcome of your case. By running the numbers, our attorneys can give you the true value of the policy you purchased or your employer-paid group LTD plan.
We can help you negotiate a more appropriate and sustainable settlement of your benefits claim. This applies to different claims processing scenarios, one of which is a lump sum payout.
Lump Sum Settlement Offers and Your Claim’s Value
A lump sum settlement happens when the insurance company offers you the option to accept one single payout from the insurer for the remainder of your policy. This takes into account the future value of your claim.
Insurers favor lump sum settlements for various reasons motivated by financial gain. A common example is when a disabled claimant is in a situation where the insurer realizes they will not be able to deny the claim on a reasonable basis. So they would rather not pay on that claim over a course of many years.
The insurer will offer a lump sum settlement, or buyout, at a reduced rate. The insurer anticipates paying far less than 100% of the claim‘s dollar value.
Add to that, disability settlement offers are based on “present-value” calculations. Present value is the value right now of a sum of money, in contrast to its future value after being invested at compound interest.
Settlements may also take into account any past monthly benefits and Cost of Living Adjustments.
Lump sum settlements are not for everyone.
A multitude of factors impact the decision to accept a one-time buyout as opposed to monthly benefits over the course of time. In some situations, a buyout can be worthwhile, and sometimes it is losing proposition. Both sides of the argument carry risks:
- If you go for the lump sum, do you have other financial resources?
- Would your lump sum buyout be taxable? Most employer-paid benefits are.
- If you go on claim, suppose the insurance company terminates your benefits at some later point?
- Are you sure your insurer will still be solvent in or 5 or 10 years?
Responding to Your Insurer’s Low Disability Settlement Offers
Whatever form they are in, disability settlements are important life choices that require a lot of thought.
It is important to enlist the counsel of experienced LTD lawyers. In cases of lump sum settlements and other negotiations with insurance providers, we can work with the insurer to maximize the settlement payout.
Negotiating Disability Settlement Offers
Your disability settlement offer should be sufficient to cover your medical bills, lost wages, and all other monetary claims associated with your disability. Always work with an attorney whose focus and expertise is disability insurance.
At Marc Whitehead & Associates, we know current law and case law, federal ERISA law and state insurance laws. Our attorneys maintain a working relationship with all major LTD insurance companies. When legal action is called for, we have the resources to get you the payout you deserve! If you need help today, call us at 800-562-9830 for a free case evaluation.