If you receive regular disability insurance benefits, you may wonder if it’s possible to cash out your benefits as a lump-sum payment.
Said quickly and simply, it may be possible to do so under certain circumstances. Read on to learn more.
How You Can Cash Out Your Benefits
Not every policyholder will be eligible for a cash buyout of disability benefits. Insurance companies typically only offer cash buyouts if they anticipate the decision will save them money in the long term.
Advantages of Cashing Out Your Benefits
A lump-sum payment may allow you to invest your money in something that will provide returns over time. You may choose to amplify your retirement savings or purchase a sound investment that will provide significant gains down the line. Perhaps you want to start a new business venture or invest in yourself by learning new skills that don’t interfere with your disability.
It’s important to keep in mind that many disability insurance policies do not provide rights of survivorship, which means your benefits will die with you.
In addition, a lump-sum payment can help you avoid having your benefits denied or your claim terminated by the insurance company. Once you accept a cash buyout, you don’t have to continue providing supporting medical documents to prove your disability.
Drawbacks of a Lump-Sum Payment
It can be tempting to accept a cash buyout of your benefits, but it’s important to appropriately weigh your options so you make the best decision for yourself and your family.
If your occupation qualifies you for a “lifetime payout” and your family genes are known for longevity, it may be wise to continue receiving regular payments.
Additionally, if you know you are not the best with money management, it may be wise to reject a cash buyout.
Last, but not least, the insurance company may offer you a cash buyout because it is to its benefit over yours. You may end up sacrificing more than you bargained for by accepting a lump-sum payout.
We’re Here to Help
If you have questions about a lump-sum payment or anything else related to long-term disability benefits, our team is here to answer them. Don’t delay—reach out to our office right away.
Call Dabdoub Law Firm today at (800) 969-0488 to speak with an experienced attorney about your case.
