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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.

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.

A buyout is a one-time lump sum payout from your disability insurance company in lieu of paying ongoing monthly long-term disability (LTD) benefits. The payout is usually a single lump sum payment although sometimes it can be disbursed in several installments.