Lump-Sum Policy Buyouts

Disability Insurance companies sell long term disability policies with the hope that they will never need to pay monthly benefits to an insured. Once an insurance company becomes obligated to pay an insured monthly disability benefits, the insurance company is losing money. In an effort to cut their losses, most disability insurance companies are always interested in the opportunity to buy-out an insured’s disability policy for a one-time lump sum amount.

Our disability lawyers have established relationships with the people at each disability company that make the decisions on disability buyouts. Since 1979 we have helped our clients to recover hundreds of millions of dollars in disability benefits. We always offer a free immediate phone consultation to discuss how we could help you. We work closely with actuaries, financial consultants and treating physicians in order to maximize a buy-out offer.

Watch our video above to learn if you are eligible for a disability lump-sum buyout.

How Are Lump-Sum Buyouts Calculated?

Every disability company has their own methodology and formulas for determining the value of an insured’s disability income policy. As a result of handling buy-outs with almost every disability insurance company, we are well aware of each company’s valuation methods. There are multiple factors involved in determining the value of an insured’s disability income policy. Some of the factors that insurance companies will consider are:

  • the life expectancy and mortality of the insured;
  • the current corporate bond rate;
  • the likelihood that the insured will remain totally or residually disabled;
  • the amount of insurance company reserves for the specific policy;
  • the present value of future monthly disability benefits;
  • the age of the claimant and years remaining on the policy

In every lump-sum policy buyout, the insurance companies will make an offer that is discounted to present value dollars. This means that if the future value of an insured’s disability payments in 10 years would be $960,000 ($8,000 a month multiplied by 120 months), then the present value is the amount of money an insured needs today at a stated interest rate in order to equal $960,000. Assuming an $8,000 monthly benefit, 120 months of remaining payments, and an interest rate of 4%, then the present value of $960,000 would be approximately $790,000. This means that if you deposited $790,000 in the bank today and received an interest rate of 4%, then you would have $960,000 ten years from today if you never touched the money.

The present value amount is always less than future value. Insurance companies only offer settlements based upon the present value and they will never pay 100% of the present value as there is no financial benefit for them to do so. They will however, use the previously stated factors in arriving at a buy back amount.

Companies Offering Disability Buyouts

Disability insurance companies are not required to offer a lump-sum buyout of a disability, yet of the 40 different companies there are some that do so more than others. The ten most common disability companies that will consider a disability buyout are:

  • Cigna (Life Insurance Company of North America)
  • Unum
  • Prudential
  • Lincoln Financial (Acquired Liberty Mutual in 2018)
  • Hartford (Acquired Aetna Disability in 2017)
  • Sun Life Financial
  • Disability Management Services (“DMS”)
  • The Standard
  • Met Life
  • Trustmark

When Does a Disability Buyout Make Sense?

Lump sum buy backs are not advisable for everyone. However, they often make sense for an insured for the following reasons:

  • cash received is often tax free to be invested as you desire;
  • no risk of future denials or uncertainty of upcoming benefits;
  • monthly benefits end at the death of the insured;
  • cash received now can be used for estate planning or new venture;
  • no longer subject to insurance company solvency;
  • option to try a return to work without insurance company scrutiny.

If you are interested in pursuing a lump-sum disability buyout contact Attorneys Dell & Schaefer to make sure you are receiving the maximum buy-out possible.

FAQ

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

Reviews

Bruce R. (Arizona)

Steve Dell has done an exceptional job with my disability application process. The firm is extremely well managed. They have acquired an incredible amount of experience over many years. I recommend them for disability insurance claims without reservation. 

Don (Florida)

I called this firm a few months ago completely disparaged due to a company cutting off disability benefits at a time that nearly caused me to lose everything.

Attorney Alex Palmera and Danielle worked hard to reach an amicable settlement and my case was settled a few months later. This is a good firm and the specific expertise in disability claims saved me countless hours of hassle at a time when an already fragile state existed.

Thank you Mr. Palamara and Danielle.

Sandra B. (Arkansas)

I have nothing but good things to say about how my buyout was handled with my disability claim. The level of professionalism was amazing. All of my questions and concerns were answered either by Danielle L. or Alex P. in such a timely manner and with such care I would recommend them in a heartbeat to anyone needing to approach their provider with buyout options.

They did a fantastic job communicating between the provider and me, always keeping my best interest at heart and always answering my many many questions. They really did take most of the stress out of this whole situation. I would give them a 10 out of 10 for every step of this crazy journey. Thank you so much for helping me through this.

Brenda R. (New York)

I needed assistance with an appeal for a LTD claim that was initially denied. Stephen understood what needed to happen to win the appeal and he did win the appeal for me.

Michael C. (Virginia)

Greg Dell and his assistant Anneli have been extremely responsive and helpful, not only our initial consultations, but in follow-ups 1 and 2 years later with the insurance company to ensure that they comply with their agreements (which they did), as well as a separate and only slightly-related inquiry about our health insurance. I always hear back from them very quickly, which is rare and greatly appreciated.

Jeff P. (Oklahoma)

After a very long and frustrating ordeal to keep my LTD payments coming I decided to seek assistance from and attorney. After much research and asking those in the legal profession Dell & Schaefer seemed to be the top choice. I reached out and Alex Palamara was the attorney assigned to my case. All I can say is the experience was outstanding. Both Alex and his Paralegal, Danielle Lauria were excellent to work with. They were very kind, concerned, understanding of my frustrations and treated me with the utmost respect. Communication was excellent with regular updates and telling me what I could expect in each stage of the process.

Alex was also very straight forward with what to expect and no pie in the sky promises or expectations were made. In the end we won our case and I believe it was solely due to their experience and knowledge of not only the laws but the insurance companies as a whole. I would highly recommend them and am very grateful for the help they afforded to me.

Chad B. (Illinois)

I originally spoke with 3 other long term disability lawyers about my case before contacting Dell and Schaefer. None of those law firms would take it. They said the chances of me winning was not good. After finding Dell and Schaefer online I spoke with one of the attorneys that has since left. He did take my case but later it was picked up by Rachel Alters. Rachel is amazing and a very intelligent attorney. She not only won my case but also was able to get my back pay for 6 months.

I also cannot say enough about Sonia Nogueira. Sonia was always quick to answer any of my questions. I would usually hear back from her within hours of sending her a email. I do not know where I would be if I hadn’t contacted them. My family and I cannot thank them enough. Don’t let an insurance company tell you they are not responsible for paying you. I paid them for 20 years monthly and they looked for any reason they could not to have to pay me when I needed my benefit. Thank you Rachel and Sonia for all you guys do.

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