Many employees already receiving long-term disability, or are fighting in court for those benefits, have to consider a lump sum buyout.   It is important to consult with your ERISA lawyer first. While these lump-sum settlements often make sense, there are many factors to consider, both good and bad.  On the "bad side" a settlement is final, and a one time only deal.  Once the claim is settled there is no second chance. You will also need to understand, and be able to properly calculate, the "present value of the claim" ( a complex task to say the least!)   On the "plus side" are the following:

  • Not having to be deal with the insurance company.  A buyout of benefits allows you to live your life without the constant shadow of having to prove, again and again, that you do actually suffer from a disability.
  • A lump sum agreement can prevent the insurance company from terminating a claim once the claim falls under the "any occupation” definition of disability.
  • While receiving monthly payments, that money is to be budgeted for paying monthly living expenses. If you should get a lump sum buyout, you can use those funds where needed and where you see fit.  You can control how and when to invest the money when (and use it where it is desired).

Every situation is different.  You should get legal advice from an experienced ERISA attorney before you reach an agreement.   We have counseled hundreds of disability clients on these options (in addition to the thousands of other personal injury cases we have helped settle over the years).