Beware of unreasonable Prudential Disability Insurance lump sum buyout offer

Our law firm was recently contacted by an individual that was receiving long term disability income payments from Prudential. This disability claimant has been on long term disability for approximately 12 months. His disability is the result of a disabling knee condition. His Prudential long term disability policy defines “disability” for the first 24 months as the inability to perform the substantial and material duties of his occupation. After 24 months the definition of disability changes to the inability to perform the material duties of any gainful occupation. Gainful occupation is an occupation that will pay at least 60% of the claimants pre-disability earnings. This is known as the “any occupation” definition.

This disability claimant received a letter from Prudential offering a lump sum buyout of his disability policy in exchange for the full surrender of his long term disability policy and the advance payment of an additional 12 months of disability benefits. The claimant advised me that he spoke with someone at Prudential and they said he should take the offer because he will not be eligible for benefits when his definition of disability changes to “any occupation.” This particular claimant is not only having medical problems with his knees, but he is experiencing hip and back problems. I advised this particular claimant that there is a high probability that he will remain eligible for disability income benefits when his definition of disability changes. I also advised that since you have no idea what your medical condition will be in the next 12 months there is simply no reason to take the buyout and give up your policy. “I also advised that is was wrong and misleading for the Prudential representative to persuade the claimant into believing his benefits will end at the end of 24 months”. If this claimant were to accept this unreasonable lump sum buyout offer, he would likely be giving up his rights to over an additional $500,000 of long term disability insurance benefits.

Prudential is one of the top three largest group long term disability insurance companies and this recent buyout offer may be an indication of a new strategy they have implemented in an effort to eliminate their long term disability claim exposure. Lump sum disability buyout offers must be considered with great caution and you must understand all of the terms of your disability policy in order to make the right decision.

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There are 30 comments

  • Joyce,

    Please feel free to contact our office to discuss your claim.

    Stephen JessupAug 25, 2015  #30

  • I’m in Texas and filed for STD with Prudential end of July due to grand mal seizures. I was off in February for five weeks for the same thing. Tomorrow will be 4 weeks off of work and I’ve received two payments from them and now they’re playing the “we haven’t received the paperwork from your doctor” game. So each day I confirm with the neurologist paperwork has been electronically faxed to Prudential and shows received yet Prudential says they’re not getting it. I let them know just by reading online how many class action suits are out there due to this practice of theirs, it’s clear that’s what they’re doing to me.

    Should I get legal counsel?

    JOYCE OppermannAug 24, 2015  #29

  • Delana,

    Unfortunately, there is never a guarantee of benefits so Prudential could deny your benefit after the overpayment is repaid or even prior to that point based on its review of your entitlement to continued benefits.

    Stephen JessupJun 30, 2015  #28

  • I have SSDI AND a disability retirement from Alameda County in Ca. Prudential has issued an 18,000 dollar over payment as the results from off sets from first State disability, then from SSDI, now from Alameda County Highland Hospital. If I take out a loan or do a loan plus payments I’m worried they will stop my minimum 250 dollars per month. Once back payments are satisfied I’m concerned they will terminate me without any reason. Ending all benefits. If I pay the 18,000 is it legal to terminate me, and pay nothing… They say they owe the minimum 250 but are stopping because of the just announced over payment – help.

    Delana F.Jun 29, 2015  #27

  • Lana,

    I am not sure if they are canceling your disability so much as not forwarding your monthly benefit to apply same to the overpayment. There does stand a chance that Prudential might be willing to negotiate a lump sum buyout of the future value of your claim. Please feel free to contact our office to discuss your options in further detail.

    Stephen JessupJun 29, 2015  #26

  • Sir, prudential has now sent me an overpayment demand of 18,000 after I was approved for disability retirement. They are also already off set for full SSDI leaving 162 a month. How can they justify with LTD insurance to cancel me altogether? On what basis? I will make payments to them of 250 plus the gross 250 they owe me that’s 500 a month. In just under 3 years it’s repaid. They didn’t give me a lump sum. How can they cancel me? I’m fully disabled, Help?. Lana F.

    Lana F.Jun 28, 2015  #25

  • Nicole,

    Your claim will be as strong as the available medical information going into the any occupation review. Prudential could readily use the SSDI denial as evidence that you are not disabled from performing the duties of “any occupation” but it cannot be the sole reason for a denial of benefits. As your claim is near the 2 year occupation switch, Prudential’s review is already well underway – please feel free to contact our office to discuss your claim in greater detail.

    Stephen JessupJun 25, 2015  #24

  • Went on STD 11/2013 which switched to LTD with Prudential 03/2014. Oct 2014 was informed that I needed to apply for SSDI and they pushed using Allsup services which they stated they were contracted with. Since I was constantly under ongoing review for continuing benefits, I felt that it was in my best interest to go with the organization of their choosing. Allsup assisted in filing my SSD application in Dec 2014. I just finally received my first decision letter dated 6/22/15 which was a denial. Allsup will assist me appeal. Prudential is currently doing another “6 month review of my case” I am worried they will terminate my benefits since I was not approved for SSD benefits. Furthermore, I am coming up to the 2 year mark where the definition changes to any gainful employment. Again, I fear they will use this as an excuse to terminate benefits. I have severe symptomatic Ménière’s disease (confirmed by caloric testing and continuing hearing loss–severe to profound) resulting in frequent vertigo with several unpredictable falls per week and frequent nausea and vomiting. I haven’t driven in well over a year due to the unpredictability, my husband is afraid to leave me alone so I am usually in the company of a “babysitter” of sorts and spend a great deal of my time in bed sleeping off the vertigo. Add to this, cervical radiculopathy, vestibular migraines and rheumatoid arthritis and I find it fascinating that the DDE determined I am not disabled and capable of gainful employment. Yes, I am certain any employer would be happy to take on a woman that appears to be puking drunk 4-6 days out of the week, and the other 2 days usually still experiences rather debilitating pain. SS DDE’s incompetence aside, how do I protect myself from being a victim to Prudential making the same decision?

    NicoleJun 25, 2015  #23

  • DellaSue,

    First and foremost I think it is important to verify the overpayment amount is in fact correct. You can certainly discuss repayment options. However, please note as it relates to your concern that there is very little anyone can ease your mind regarding a potential denial of benefits once the overpayment is collected – or worse, if the claim is denied while it is still in overpayment. Please feel free to contact our office should you have any additional questions.

    Stephen JessupJun 6, 2015  #22

  • I went on Ltd two and half years ago. I was approved for SSDI in January of this year. Prudential is was saying that I owe them $22,000.00 Which is more than I got in retro. I got $11,000 and my daughter got $4,000. Social Security is saying that Prudential has no claim to my daughter’s back pay. The last time I spoke with prudential, they are now saying I owe app$15,000.
    I can pay them $8,000 But I’m not sure what to do about the remainder. I don’t really want to do a buyout since I’m 48 and my daughter is only 6. If they keep my monthly benefit, will the cancel the claim after its paid? What are my other options?

    DellaSueJun 5, 2015  #21

  • Lana,

    Unfortunately, disability retirement is typically a source of Other Income subject to offset under an employer provided disability policy. If your policy indicates same, then Prudential is within their rights to deduct for same.

    Stephen JessupJan 27, 2015  #20

  • LTD with Prudential for 2 years. It is already onset for my SSDI. After I received a disability retirement from Highland Hospital, they have now almost totally offset the whole amount of my benefit. I am eligible to receive benefits from Prudential. But, they are off setting the entire amount of my other two incomes. It went from 2500 to 1190 now to 164. Was just 164 when I had state disability too for 1 year also. After State disability ran out up to 1190 the with new disability retirement back to 164. Threatening to terminate. It’s long term disability. Can they do this to me? Help!

    Lana F.Jan 26, 2015  #19

  • Erika,

    Unum does not typically negotiate lump sum buy outs prior to the expiration of the own occupation period, so the likelihood of a negotiated buyout at this point is minimal. Please feel free to contact our office to discuss how we can assist you in the monthly handling of your claim so as to avoid a potential denial into the any occupation benefit period and to set your claim up for a stronger likelihood of a buyout after the any occupation review.

    Stephen JessupNov 14, 2014  #18

  • I dislocated my knee in July of 2013, tearing all of the major ligaments in my knee and causing damage to my peroneal nerve. Since that time I have had 5 surgical procedures and fully expect to have at least one more. I was receiving short term disability benefits, which switched to long term benefits in Oct of 2013. My insurance is with Unum. They have already denied my benefits once in June of this year (2014) when their occupational advisor declared that I was able to return to their definition of my occupation (which vastly differs from the actual requirements of my occupation). My occupation is a surgical technologist in an OB department, formally labeled by my hospital as “OB tech”. I requested a review of my claim and after the review they reinstated my benefits, finding that my disability is medically supported. I get calls from the claims representative regularly, it feels somewhat threatening like they could cut off my benefits at any time which is a scary position to be in. I will need at least one more surgery in the near future and the nerve damage in my leg causes pain and other complications such as tripping/falls. My policy states that Unum will pay LTD benefits for 2 years if I cannot return to my occupation, then will continue to pay if I cannot work at any gainful employment. I am tempted at this point to ask for a lump sum for the remainder of the two years that they will have to pay if I cannot go back to my position, but then I don’t know exactly what position I am going to be in physically at the end of that time and I don’t know if there is a chance that they would have to continue to pay me. At the same time, I would like the lump sum because I don’t like this feeling that they can deny my benefits at will, which they have already done once, making for an extremely difficult few months until the review was completed and my benefits reinstated.

    Erika C.Nov 13, 2014  #17

  • Earl,

    Our office has successfully negotiated buyout with Prudential in the past and they may be willing to negotiate a buyout that also contemplates repayment of the overpayment. Please feel free to contact our office to discuss how we may be able to assist you in securing same.

    Stephen JessupOct 28, 2014  #16

  • Been receiving LTD disablity since 2002 and in 2011 I adopted a child and he was added to my SSDI which I started in 2005. Now Prudential wants me to repay overpayment of nearly $21,000, for almost 3 years. I would take 4 years to repay this amount, or they are asking for a check by Nov 4. Can I ask for a buyout for the term of my claim? I’m 52 years old, if my disabitily continue, which it should, to my term of the policy of in the year 2027.

    EarlOct 27, 2014  #15

  • Mark,

    From your fact pattern it does not appear that your condition would be excluded due to a pre-existing condition limitation. If your initial injury is service related (and I assume it might be since you quote that provision from your policy) it would be unlikely that Prudential would try to exclude coverage if the initial injury occurred over 16 years ago. Please feel free to contact our office to discuss your potential claim in further detail in order to best apprise you of what you might expect.

    Stephen JessupAug 11, 2014  #14

  • I am hoping for some clarification on my current LTD policy with Prudential. I had two back surgeries over 16 years ago and have been working without any accomodations since then. I have recently started experiencing some new back pain that is coming from arthritis and some other issues. The doctors are wanting me to go out on LTD, but I am hoping to be able to remain at work, but not sure if I would qualify based on this exclusion. I have been on the plan for about four years now.

    Your plan does not cover a disability which:

    Begins within 12 months of the date your coverage under the plan becomes effective; and

    Is due to a pre-existing condition

    Your plan does not cover a disability due to war, declared or undeclared, or any act of war.

    Mark W.Aug 10, 2014  #13

  • Amanda,

    Please feel free to contact our office to discuss how we may be able to assist you with your appeal to Prudential.

    Stephen JessupJul 15, 2014  #12

  • I have been off work for exactly one year, I have applied for social security disability and been denied twice now waiting for hearing date. Prudential paid my short term benefits until January 09, 2014, at which point LTD should have kicked in I have been denied twice and working on my second appeal I have legal representation for social security but not Prudential.

    Amanda MayesJul 14, 2014  #11

  • Dustin,

    Prudential reviews lump sum buyouts of claims on a case by case basis on a variety of criteria. First and foremost, they would most likely want any overpayment on account of your SSDI repaid before they would enter into any potential negotiations. Please feel free to contact our office to discuss how we may be able to assist you in securing a lump sum buyout of your claim.

    Stephen JessupMay 14, 2014  #10

  • I have been on LTD through Prudential for 2.5 years and was just awarded ss benefits and of course they want more than the back payment. I am frustrated with Prudential and would like to be done with them. I have chrons & back and neck problems as well as other long term problems. My health is not going to improve, I just have to deal with it. Dealing with Prudential suspending my benefits from time to time stresses me to no end and stress makes my condition much worse. Any chance that they would buy me out?

    DustinMay 13, 2014  #9

  • Ann,

    If you do not refund the SSDI overpayment Prudential could withhold your benefit check until the repayment is satisfied or could possibly send you into collections. With respect to cutting you off, it is not uncommon for a carrier to withhold the benefit check until the overpayment is collected and then terminate the disability benefit.

    Stephen JessupNov 20, 2013  #8

  • I have been on ltd thru prudential in fl, it will be 2 years in July 2014. If I gett tero from ssd, what will happen if I don’t pay? My contract says it will be pro-rated monthly, that I understand….but I am afraid of them cutting me off. One of my medical conditions says aixiety which is payable for 2 years. But they have approved me until I am 62.

    Ann

    AnnNov 18, 2013  #7

  • Jason,

    Prudential is very selective in the cases it will consider for lump sum buyout. Proper presentation of the request can make the difference in Prudential’s interest. If you are interested in discussing how we could assist you, please feel free to contact our office.

    Stephen JessupOct 11, 2013  #6

  • I have been pre-approved for max benefit from Prudential until the age of 65. I am currently 42. I just got approved for SSDI. I am unable to work due to my injury and limitations. There was a retro check but after everyone else took their pieces of the pie there was little left. Basically there is a $900 difference between what I get from SS and what they approved me for. So they are on the hook for the $900 every month. I am wondering if approaching Prudential with a buyout without an attorney is good idea. I assume I can suggest getting a total lump sum offer, and then they can satisfy the retro check by taking the amount off the top of the offer to offset and make it right. Now I realize I am taking a chance and signing off on all and any future claims in this matter. So basically I am wondering if I am figuring this out correctly. Any thoughts or comments would be greatly appreciated. Also to clarify I have settled my worker’s comp. case. The amount I have been approved for and did my calculations, were based on max benefit minus the settlement offset. I know its alot to throw out there and get someones take on things.

    Jason AhlquistOct 10, 2013  #5

  • Pat,

    Your question is very specific and we would need to review the terms of the offer from Unum. We may also be able to get you some more money. Call us to discuss your options.

    Gregory DellNov 9, 2012  #4

  • I have been on LTD for 2 years and 100% SS Disability for almost 2 years. I was just offered a lump sum payment by Unum. Numbers are based on 65% of disability payments to age 65. I currently have group health insurance through employer. My question is, will I loose my health benefit if I accept this offer? I know I will be able to get Medicare in 2 months but my GHI benefits and costs are much better.

    Pat DrabinskiNov 8, 2012  #3

  • Tom, Standard uses third party companies to request medical records during long term disability claims. According to HIPPA laws you have privacy rights when it comes to medical records. You have an obligation to provide Standard with your medical records. You need to read the Authorization that Standard wants you to sign very carefully. If you limit their ability to get medical records, then Standard can deny your long term disability benefits. You can get all the records yourself and send it to them or tell them that you want specific medical authorizations for any entity they want to request records from. Do not tell them you will not release records as they will deny your claim. You should also be aware that Standard will likely call your doctors or send letters to them with one sided questions. You should only deal with Standard in writing.

    Gregory DellSep 13, 2010  #2

  • Have rec’d LTD benefits almost 3 years. I qualify for any occupation. The soc sec ALJ also stated that I could not qualify for any gainful employment positions in thr nat’l economy. My concern going forward is that the Insurance Carrier (Standard) will find some goofey reason to deny me, and by hiding behind discretionary authority, they will succeed. I recently was sent a letter from ENGINIX requesting a lot of information. I told Standard that because of ENGINIX’S fraud conviction, I was hesitant to provide any information. I wrote Standard a letter stating my concerns and wanted to know who would review the info and a copy of thier privacy policy. Haven’t heard from them yet. I think Enginix is a subrogation company. Should I sign and return the info. I want your opinion not legal advice.

    Tom PresgroveSep 7, 2010  #1