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Being forced out of work long term because of a disability can cause huge disruptions and challenges. A 2019 bankruptcy study found that 44.3 percent of filers cited loss of income due to medical issues as the reason for their filing.

According to tabulations made by the Social Security Administration (SSA), about one in four of today’s 20-year-olds will miss at least one year of work before reaching the normal retirement age (67) due to a disabling condition.

Attorney Victor Peña, of Victor Peña Law, PLLC successfully negotiated a lump sum buyout for a claimant who had no luck securing a disability settlement with his former attorneys. This 49-year-old, former employee of a major American media conglomerate had become frustrated dealing with Hartford’s ongoing review after receiving long term disability benefits for over 20 years.

Almost every person faces challenges and hardships at one time or another. However, for individuals with disabilities, their physical or mental impairment can limit them from performing major life activities. The U.S Census Bureau indicates that more than 19 million American adults of working age have disabilities that prevent or restrict their ability to work.

Picture this: you’ve been on long-term disability insurance for a few years and suddenly your insurer contacts you with an offer. They’ll give you what they term a “generous” buyout of X amount of dollars if you forego the remaining periodic payments that you are owed.

According to the 2018 Annual Disability Statistics Compendium, about 2.7 million (13.4%) Florida residents are living with disabilities. When an employee or business owner becomes disabled and unable to work, the insurance company may approach you with a settlement offer to buy out your remaining future disability benefits.

According to data from the U.S Census Bureau, over 19 million American adults of working age have disabilities that limit or prevent them from working. In the event that an employee or business owner becomes unable to work due to an accident, injury, or illness, disability insurance provides financial assistance to replace some of their lost income. At some point during your claim, however, your insurance provider may approach you with a lump-sum buyout offer.

The National Association of Insurance Commissioners (NAIC) creates rules to be followed by insurance companies for “statutory reserving.” Such rules provide minimum reserves that a company must hold for claims that have been reported or incurred. The 1987 Commissioners Group Disability Table (CGDT) provides specific guidance for the valuation of group LTD claim reserves although the specifics of calculations should be left to experienced actuaries.

There are several reasons why you may be asked by your Long-Term Disability (LTD) company to pay them back the benefits they already paid you. The request is usually as a result of an overpayment claimed by the insurer. The overpayment can be due to your recent receipt of deductible income from a source considered offsetable under your policy. The overpayment can also result from a miscalculation due a mistake by you or your disability insurance company.

A lump-sum payment instead of long-term disability (LTD) payments with its concomitant red tape and reviews may be very tempting, but it requires the assistance of an experienced and knowledgeable lawyer to plan, calculate and think through the pros and cons.