When you ask a lawyer how much your disability claim is worth, the only answer you will get is that there is no specific number. Every long-term disability claim is different from the others, and even with two similar cases, certain factors might make them unique. Until you hire an attorney and have them review your case thoroughly, there is no telling what amount you might end up with.
When it comes to long-term disability payment, there are two types to consider– reinstatement or full and final. The first one gives you monthly payments, while the second option lets you have a one-time lump sum. Regardless of which option you prefer, it helps to consult with an attorney and discuss how disability insurance companies handle your claim.
Which factors affect the value of a disability insurance policy buyout?
Value of your remaining benefits.
The total value of your remaining benefits is the amount you get paid monthly multiplied by the number of months of coverage left. For example, if your monthly benefit is $4000 and you have ten years till your benefits end, your long-term disability benefits would be worth $480,000. However, your settlement amount will be lower than this due to certain reasons.
Net present value of your future benefits.
Due to inflation, the value of $4000 today will not be the same in 10 years. Therefore, to create a rough estimate of the value of disability insurance, your insurer will need to calculate the net present value (NPV) of $4000 in the coming years.
Your life expectancy.
If you are likely to pass away before your benefits are scheduled to end, the lump sum will be transferred to your heirs or stopped if you opt for monthly payments. If the insurance company believes you are not going to live until the end of your benefits period, they may offer a lower payout.
How long you will need the benefits?
If the insurance company believes you are likely to recover and return to work before your benefits period ends, they may refuse to offer a buyout offer.
Should you settle your long-term disability claim?
Agreeing on the first offer and settling your long-term disability claim without consulting your attorney can be a huge mistake. Once you settle, you cannot go back and request a higher amount, regardless of the evidence you have. For these reasons, it is extremely important to understand what your claim is worth before settling.