Long-Term Disability Buyout? What to Know

If you’re considering challenging the denial of your disability claim, chances are you know that these payments are often settled or “bought out.”

A long-term disability buyout is a lump sum payment processed by your insurance company to buy out the future of your disability claim or a disputed portion of unpaid benefits. Essentially, the insurance company is buying you out of the policy, effectively eliminating their financial obligation towards you. In most cases, this is only available as a way to settle a disputed LTD claim. In some cases, however, an insurance company may be prepared to buy out the claim.

Are you seeking a long-term disability buyout? At Share Lawyers, our experienced long-term disability lawyers will fight for the benefits to which you are entitled.

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Long-Term Disability Buyout? What to Know

A long-term disability buyout is a one-time payment representing what the insurance company thinks your future disability payments are worth. Instead of getting monthly payments over time, you get all the money upfront. Once you take the lump sum, the insurance company is done with its financial responsibility.

Every situation is different, and insurance companies look at each case individually to determine if a long-term disability buyout is appropriate. If you are attempting to discuss a buy-out directly with your insurance company, proceed with caution and consider getting legal and financial advice.

Long-Term Disability Buyout Factors to Know

1. Payment Type

A one-time lump sum payment that represents a portion of the value of future disability payments.

2. Financial Liability

Once the lump sum payout is accepted, the insurance company's responsibility ends.

3. Entitlement

You have no right or entitlement to a lump sum settlement. It is something that is at the discretion of the insurance company.

4. Case Evaluation

Whether it makes sense for you is determined on a case-by-case basis because each situation is unique.

5. Caution in Approach

It makes sense to obtain professional advice before accepting a buy-out of your LTD claim.

6. Tactful Communication

Use caution when discussing a lump sum buyout with the insurance company.

7. Negotiation Goal

Insurance companies aim to save money, so any settlement amount needs to make financial sense for them.

8. Payout Percentage

You won't receive 100% of future benefits, as the amount will be a compromise to factor in mortality risk, the possibility of returning to work, the present value of the future benefits, and the strength of the proof of your disability

Having a skilled disability lawyer, like Share Lawyers, can be an asset in these negotiations as we can guide you on what to expect and what choices might be best for you.

Does a Lump Sum Long-Term Disability Buyout Make Sense for You?

A lump sum buyout for your long-term disability insurance policy isn't right for everyone because it doesn’t guarantee the complete value of your future payments. You'll only receive a percentage.

If your disability proof is irrefutable, which is uncommon, choosing monthly payments over time might get you more money. If handling a large sum seems daunting, sticking to monthly payments could be the wiser choice.

Circumstances Where a Lump-Sum Buyout Can Make Sense

1. You foresee an improvement in your health and believe a period of financial security could allow you to return to some form of work.

2. You aspire to return to work at some point in the future and don’t want to have to continue dealing with the insurance company.

3. You want to sever ties entirely with the insurance company.

4. Uncertainty of future benefits being terminated or delayed is causing stress, and you want to eliminate this worry.

5. Your “proof of disability” isn't entirely convincing (for example, no diagnosis or an invisible disability without objective proof).

The Value of Hiring a Disability Lawyer

The legal aspects of a denied disability claim can be challenging to understand. A team of skilled disability lawyers offers personalized guidance and representation customized to your specific situation. Our lawyers excel at planning negotiations and standing up for your rights—critical elements in achieving a just settlement.

Securing a disability settlement may seem daunting, but you don't have to face it alone. With dependable legal support, you can challenge denied claims and work towards a settlement that meets your needs.

Share Lawyers Fights for the Benefits You Deserve

Now that you understand how a long-term disability buyout works, it’s time to consider getting a disability lawyer in your corner.

At Share Lawyers, we’ve dedicated over 35 years to helping Canadians secure their disability benefits. We understand how frustrating and unjust a disability insurance denial can be.

Allow us to bear the responsibility of engaging with your insurance company while advocating for your benefits, freeing you from the stress of constant communication and daily tasks. Opting for Share Lawyers means you'll have a devoted team of disability lawyers working to protect your rights and well-being. We are dedicated to your cause, and our payment depends on your success.

Need to learn more about how a long-term disability buyout works? We’ve got you covered.

Contact Share Lawyers today and put our experience to work for you. Our 35+ years of experience can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. Our legal team offers a free consultation and works on a contingency basis - there are no fees unless you win your case.

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