The short answer, nothing should happen if you reject a lump sum settlement from your insurance carrier. But, unfortunately, that is not always the case.
Most disability insurance companies sell disability insurance policies and happily collect premiums year after year hoping that you will never become disabled or try to collect disability benefits. Once you successfully file a claim for disability benefits and begin collecting the monthly benefits you are entitled to, the insurance company starts losing money. It is in their interest to cut their losses as much as possible.
In some claims, this may lead the insurance company to offer you a lump-sum settlement. This is a one-time payment to “buy out” your disability policy and claim. If you have been offered a lump-sum settlement and want to explore your options, it is important that you speak with a lawyer who specializes in disability insurance law.
Should I Accept a Lump-Sum Buyout?
There are a number of reasons why you may benefit from a buyout and others that may make you wary. When you accept a lump-sum buyout, you receive the entire amount agreed upon amount all at once. This means you can use or save the money however you wish.
It can also give you peace of mind in that you can stop worrying about whether and when the insurance company will decide that you are no longer disabled and terminate your benefits.
However, it is also important to consider the amount that you are being offered, the tax implications, and the loss of future coverage under that policy, among other things.
What Happens if I Reject the Lump-Sum Buyout?
First, know that you are under no obligation to accept the insurance company’s offer to buyout your policy by offering you a lump-sum settlement amount. In other words, your claim should not be negatively affected if you decide not to accept their offer and continue receiving your monthly benefit payment.
However, in our firm’s nearly twenty years of experience, we have seen claims get terminated down the road even after a lump-sum buyout was offered. In other words, an insurance company’s willingness at some point in time to offer you a buyout is not a guarantee that you will stay on claim throughout the maximum benefit period – and receive all the benefits you were counting on.
There are usually pros and cons to accepting or rejecting a lump-sum settlement offer that have to be considered and weighed based on your individual circumstances. If you have been offered a lump sum settlement, speak with an experienced disability insurance attorney who can help guide you through the pros and cons
Help from a Lawyer with Expertise in Disability Insurance
Disability insurance law is complex. Hiring an experienced disability attorney is important. Because all disability lawyers at this law firm focus on disability insurance claims, we have expertise in disability insurance law.
That means we have:
- Experience with every major disability insurance company.
- A proven track record of success in major disability lawsuits.
- Recovered millions of dollars in disability benefits for our clients.
And, we never charge fees or costs unless our clients get paid.
The firm can help at any stage of your disability insurance claim, including:
- Submitting your disability insurance claim,
- Appealing a long-term disability denial,
- Negotiating your lump-sum settlement, or
- Filing a lawsuit against your disability insurance company.
Because federal law applies to most disability insurance claims, our lawyers are able to represent clients across the country.
Call us at (800) 969-0488 or contact us online to speak with an experienced disability attorney. Consultations are free.
