UNUM Lump Sum Settlements
UNUM Disability Buyout Lawyer: Negotiate the Best Buyout with UNUM Settlement Attorney
Unum has a reputation as an unfair insurance company and as the oldest disability insurer it has sold millions of insurance policies, both group and individual. The company has been on the defending end of countless lawsuits for their unfair practices including several class action lawsuits. Because of this they are careful when making settlement offers to their claimants. When compared to the buyout offer letters from other insurers, Unum is quite detailed in explaining the breakdown of how they reached their figures. Unum’s buyout offers also tend to be higher than the low ball offers often seen from other carriers. Still, many of their offers are still lower than what should be considered fair. Buyout offers are calculated using a number of different factors and each factor can increase or decrease the total offer amount so it’s crucial for all elements to be properly assessed when these offers are calculated.
How UNUM Determines a Buyout Offer Amount
When determining the settlement amount to be offered, Unum considers factors such as the following:
- The medical and financial information available to Unum at the time of the review
- This includes all the information available in the claim file that was used to evaluate the claim and determine your ongoing eligibility for benefits. The most recent medical and financial review will be crucial in evaluating your eligibility for a buyout and the amount to be offered.
- The present value of anticipated future monthly benefits
- Moody’s Composite Corporate Bond Rate
- General uncertainties of the future, such as interest rate fluctuations, unforeseen accidents, etc.
- Morbidity and mortality risks
- The possibility of medical advancements
If you have received a buyout offer from Unum, you may be wondering why the offer is only a percentage of the present value of anticipated future benefits. This is because Unum will consider general uncertainties of the future and the risks these uncertainties pose. Additionally, Unum will apply a discount to generate a profit margin that they are happy with.
The UNUM Buyout Process
To complete a buyout with Unum, you will be required to complete a questionnaire providing an update of your current medical and financial information. Before a formal offer is extended, Unum will need to review the answers to this questionnaire. Unum will want to know:
- All treating physicians along with the condition(s) being treated and the frequency of visits
- Whether you have been hospitalized over the past year and the reason for the hospitalization
- The names of all medications you are taking
- Whether you are treating for high blood pressure and the last blood pressure reading if known
- Whether you treat for cholesterol issues. If so, they will want to know when your last cholesterol reading was done and the results
- Whether you are diabetic and, if so, they will want your most recent blood sugar or A1C reading, if known.
- Whether you have been treated for any of the following conditions:
- Cardiac/heart issues
- Liver/kidney issues
- Breathing/lung issues
- Vascular issues
- Whether you have ever had a stroke
- Whether you have ever been diagnosed with cancer
- Whether you drink alcohol. If so, how much and the frequency
- Whether you smoke. If so, how much and the frequency
- Any other conditions you have received treatment for
- Whether you have any continued or future benefits with your former employer—including pension/retirement, health or life insurance
- Whether you have filed any claims that include a Motor Vehicle Accident, Third Party, or Workers’ Compensation.
Unum will also require that a physician complete a Settlement Competency Statement. This is best completed by one of your treating physicians who will provide his or her medical opinion on your ability to make financial decisions. If you have cognitive impairments or any other factors that could impact your ability to make informed decisions, it will affect your ability to secure a buyout.
Should I Accept or Decline UNUM’s Lump Sum Settlement Offer?
It is important to remember that any settlement offer you receive from Unum is completely optional and voluntary. You are not required to take any offer you are not comfortable with. Still, an offer should be given proper consideration and your unique situation should be given a proper assessment by an experienced team that includes a Unum disability buyout attorney, accountant and financial advisor.
A frequently asked question is: if I decline Unum’s offer will they deny my claim as revenge? While my answer is always “no,” I will also remind a client that refusing a settlement places your claim back into the risk management pool which allows Unum to legitimately invoke their policy rights to conduct field visits/interviews, perform surveillance and schedule independent medical evaluations.
On any claim, there are a number of reasons that Unum could rely on to deny ongoing benefits and they should be carefully considered within the context of your particular case. Some claims may be more at risk of being terminated than others and it is important to carefully consider any buyout offer.
The tax implications produced by taking a large lump sum payment could be significant if your benefit is taxable and should be given serious thought and reviewed with an experienced accountant. Unum often gives you the option to take the payment in three annual installments to help ease the tax burden.
An alternative to accepting an offer in a single lump sum is putting your settlement in a Settlement Annuity that could reduce the amount of money lost to taxes. With a Settlement Annuity, you can decide how much to put into it, how it will be paid, and the length of time it will be paid. You can reduce your immediate tax liability while providing tax deferred growth. Victor Peña Law PLLC has a network of specialists that can help you decide your best options when evaluating a buyout offer.
Should I Ask UNUM For a Settlement?
If you have not received a buyout offer from Unum but you are interested in engaging Unum in settlement discussions, there are many things that should be considered before approaching Unum. The buyout process will be the same, whether you approach Unum, or you receive an unsolicited settlement offer in the mail. Unum will still want several questions answered regarding your current medical condition, treatment, any other continued or future benefits available from your employer, and any other open claims including car accident claims and workers compensation.
However, if you have received an offer from Unum then Unum has already determined that you meet their basic criteria for a buyout and that they have sufficient money in reserves to extend what they consider to be a reasonable buyout offer. You are essentially conditionally approved for a buyout as long as your answers to their questionnaire do not cause them to change their mind and as long as your doctor will sign off.
Make Sure You Have Your Ducks in A Row
If you decide to approach Unum you want to make sure all your ducks are in a row before approaching them and that your treating physician will sign off. Also, if Unum has not done a medical review, asking for a buyout will trigger one. You want to make sure your medical records accurately reflect your condition and accurately reflect your current symptoms before you have Unum start combing through the records again.
Medical Records Are Key
You may get the idea that your medical records need to make your condition look as severe as possible. That’s not necessarily the case. In fact, a terminal condition could actually diminish the value of a potential settlement. You should not assume anything and building the medical records properly could make a big difference in the amount that is offered. A full assessment should be performed with experienced disability buyout attorneys before approaching Unum for a settlement.
When Is the Best Time to Ask UNUM for A Settlement?
The timing of a settlement is crucial. Asking for a buyout too early could cause you to lose a lot of money given the time value of money and discounts applied for morbidity/mortality ratings. However, asking for an early buyout knowing that there is something else you can do to make money despite your disability could be rewarding. Asking for a buyout too late could cause you to lose a lot of money. If, for example, you only have 2 or 3 years left until the expiration of the policy Unum will still discount the total settlement offer that they are willing to pay. Taking a buyout at this late stage will probably be a bad idea. But depending on your unique financial situation, you may have a need for a lump sum of money. An emergency may call for a large sum of money that your monthly disability benefit cannot cover and so it may be worth it to you to lose a portion of the future benefits.
Ultimately, regardless of the timing, your unique financial situation will dictate whether a buyout is right for you and having the right team working for you can make all the difference.