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Is A Long Term Disability Buyout Settlement A Good Idea? – Disability Attorney John V. Tucker - YouTube
Channel: Tucker Disability Law
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Is a long term disability buyout settlement
right for you?
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I’m John Tucker.
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I’m a disability attorney and I represent
people all over the country in disability
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claims like yours.
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I’ve handled cases against all of the major
disability insurance companies.
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Aetna, Cigna, Lincoln, Metlife, Prudential,
Unum and others, and every one of them has
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at some point over the twenty-five years of
my practice have offered my clients a buyout
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settlement.
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So let’s talk about things that you need
to know when thinking about a buyout settlement.
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First, what is it?
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A lump-sum buyout is exactly what it sounds
like, you’re going to get one check that
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will buy you out of your claim forever.
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That means no future monthly payments.
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Now the insurance company is not going to
send you all of those future payments added
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up and pay you 100 cents on the dollar.
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They have no incentive to do that.
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That would be a settlement, that would be
completely giving up and giving you every
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nickel you are ever entitled to.
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They are going to offer you some portion of
that.
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And an important concept you need to understand
is called present value.
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Present value is a financial concept that
deals with the time value of money.
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That stream of payments in the future is not
worth all of those future dollars added up.
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It’s worth an amount of money you can get
today and invest at some modest interest rate
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that would add up at the end of all of your
future payments to be the same amount of money.
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Think about the lottery, when someone wins
a 20 million dollar lottery they might take
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the lump-sum buyout of 6 million dollars.
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The ideas is that if you won the 20 million
dollar lottery and you were going to get a
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million a year for twenty years, something
like 6 million dollars would grow to 20 million
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dollars over that 20 years if it was all invested.
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So the insurance company is going to calculate
the present value.
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You need to do the same thing and you can
go online and do a search for a present value
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calculator tool or something like that and
you’ll find something that will help you
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calculate the present value of your claim.
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So here is a few things to think about when
a lump sum buyout offer is made to you.
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First, the insurance company is offering you
some percentage of the benefits.
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You need to know how much of a percentage
of the present value that is.
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That lets you compare apples to apples.
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Second, the cutoff factor.
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They might cut you off if you don’t take
that buyout, they may stop paying you in the
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future because they claim that you are not
disabled anymore.
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Are you willing to deal with that?
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I’ve had plenty of clients tell me that
they just couldn’t believe that they got
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cut off because their disability was so obvious.
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I’ve had clients cutoff after 13, 15 even
19 or 20 years on claim.
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It’s all about money to the insurance company,
if they can cut you off they will.
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Next, hassle.
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Are you willing to deal with the hassle of
that insurance adjuster contacting you regularly
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for as long as those future payments are going
to come in the door?
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And finally, and this is not really a legal
factor, do you have something you can do with
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the money they are offering you?
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You might decide it’s better to take the
lump sum buyout because you want to buy a
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home or something like that.
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That’s a decision that you have to make
and it’s not necessarily an attorney like
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me can give you advice about.
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When you think about all of those things together,
you can formulate a decision on whether a
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buyout is right for you.
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Know this there is no one size fits all answer.
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You and your attorney need to analyze your
individual situation, you need good advice
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from an attorney.
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Whether you have an ERISA case under your
employer’s group plan or you have a private
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disability policy, you need an attorney experienced
in those types of claims.
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One final point, beware of settlement mills.
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There are attorneys out there that will settle
a claim to make a quick buck and I’m talking
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pennies on a dollar.
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And they don’t mind recommending a settlement
to you even though it’s too low.
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I will candidly tell you, it’s rare that
I recommend a lump sum settlement for one
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of my clients that’s on claim.
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Why?
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They’re paying you, they recognized you’re
disabled.
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If we work with our clients, we work to keep
them on claim and that’s the way they maximize
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the most amount they can get out of their
claim.
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You need to do what’s right for you and
we understand that so we will work with you
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to come up with an individual solution for
your case.
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Just beware of other firms that may not think
about it the same way.
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I know you may questions about your long term
disability claim or a lump sum buyout.
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If you do, I want you to call the number on
your screen, let’s talk about your claim.
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I handle cases like yours every day.
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I’m John Tucker.
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Thanks for watching.
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