If you cannot work because of an injury or illness, you may turn to long-term disability insurance to get the financial support you need. Through disability benefits, you can get monthly checks that you can use to pay some of your expenses. But your medical condition or injury should qualify for these benefits. To learn more about medical conditions that are entitled to disability benefits, click here.
When it comes to disability benefits, getting monthly checks is not your only option. You can also consider a long-term disability buyout. With this option, the insurance company will provide you with a lump-sum payment to pay out your insurance claim. Your disability attorney can help determine if this option is right for you.
Factors that Can Impact the Buyout Value
When valuing a long-term disability claim, it is important to consider some items. The personalized calculation of a disability attorney is unmatched, but here are factors that you should take into account:
- Remaining benefits total value. To get this value, you just multiply your monthly benefit by the number of coverage months.
- Your future benefits’ net present value When calculating the buyout, an insurer will come up with an estimate of your future benefits using today’s dollars.
- Your life expectancy Should you pass away before the scheduled end of your benefits, your payments will stop. But if you choose a buyout, your heirs can receive a lump sum’s remaining If the insurer thinks you may not live to your benefit period’s end, it may make a lower buyout settlement offer.
- How long you may need benefits If the insurer believes you cannot return to work before the expiration of your benefits and they think they have a reason to challenge your claim someday, they may not make a buyout offer or reduce their offer.
Benefits of Settling Your Disability Claim
When you take the lump sum of your disability claim, you will have control over your future finances. You may be able to invest the money and have more financial stability. Also, you may take a buyout if you don’t want to deal with the insurer disputing your future disability status.
However, keep in mind that the purpose of the insurance company making a buyout offer is to save money. So, you should not be tempted to take their lowball offer. You must be cautious about the company calculating the value of your case at face value. A disability attorney can protect you and assist you when making your final decision.