Three things can happen when you file for long-term disability benefits. You can be accepted, rejected, or offered a lump-sum buyout. Lump-sum buyouts can be offered at any point during your long-term disability benefits period. A lump sum is a deal to pay you a large sum of money all at once, in exchange for your monthly income. This may work for some people but can hurt your finances if the wrong deal is made. Talk to a Pennsylvania insurance lump-sum buyout lawyer if you are unsure about what decision to make.
Several benefits of a lump-sum buyout can tempt people into overlooking any risks associated with taking this deal. Reasons for a buyout often include a need for a lot of money right away or an escape from the anxiety of being examined by the insurance company. Many aspects of long-term disability benefits can cause anxiety.
Much of the stress stems from the rigorous examinations that insurance companies impose on their clients. These examinations are designed to make sure the person really does have a disability. Buyouts can help people avoid examinations like medical evaluations, functional capacity evaluations, private investigations, and claim forms. A person in this situation will no longer have to worry about the potential cancellation of their benefits because the buyout is supposedly designed to cover future benefits.
There are also situations in which future benefits would not be needed. These are situations that are almost guaranteed to happen. For example, if a doctor tells a patient their disability will improve within a year, then a lump-sum buyout could be a better option. The same may apply for cases in which death in the near future is a strong possibility.
With the potential benefits that a lump-sum settlement can offer, also comes potential losses. If future financial needs are not calculated adequately enough, a person may accept a buyout and find themselves in need of money after the lump sum runs out. This is why it is important to make sure the lump sum offered will be able to cover your future expenses.
A lump sum may seem like a great deal at the time, but in many cases, you can receive more money overall if you keep your long-term disability benefits. Spending the lump sum too fast is a common occurrence and can leave people without the money for living expenses later on. The benefit of long-term disability monthly payments is that they are controlled and this limits how much you spend to ensure you will be covered next month.
Be cautious about accepting lump-sum settlements from your insurance company before talking to an experienced Pennsylvania disability lawyer. A lawyer can give you an objective and informed opinion about the best option for your financial situation. Do not let the insurance company trick you into a deal that works better for them. Let us help you make the deal that works best for you. Call Edelstein & Nelson at (800) 300-0909 for a consultation today.