Understanding the legal process of disability insurance buyouts is crucial for avoiding potential problems later on. Knowing the pros and cons of accepting a lump sum disability payment may help with making this important decision. There are also important legal considerations when accepting a lump sum agreement. Feel free to talk to a Philadelphia individual disability insurance lawyer to find out more.

Pros and Cons of Disability Insurance Buyouts

There are several pros and cons of disability buyouts to consider before deciding whether to accept a disability insurance buyout. The pros are receiving a large lump sum of money significantly faster than going the route of monthly payments. Many people in financial situations where they need money right away may benefit from this option.

Difficulty paying bills, whether house bills or medical bills often motivates many people to accept a lump sum payment. However, this quick financial solution may come at certain costs. The cons of accepting a lump sum disability insurance buyout include:

• Receiving less overall money than monthly payments
• Losing your monthly payment option
• Temptations to spend the lump sum faster
• Possible fees and interest rates
• Possible requirement to pay taxes on the lump sum
• May impact eligibility for public benefits

Whereas, going with structured settlement payments or monthly disability benefit payments may help you avoid these issues. Monthly payments are often tax-free, last longer, and accumulate more overall money over time than a lump sum payment. Not only that but monthly benefits also make it easier to manage and budget spending.

In other words, monthly benefits may help with long-term financial stability compared to a lump sum that can be spent quickly. Consider contacting a Philadelphia disability lawyer to figure out your legal options regarding lump sum offers. 

Important Legal Considerations for Disability Buyouts

Multiple legal considerations exist for disability insurance buyouts. A disability insurance buyout involves various legal factors and steps. Not everyone realizes that some lump sum offers like this come with fees. Request all the costs and fees in writing so you have this documented in full.

Find out what percentage of the lump sum the buyer is keeping when selling this to you. You can request information on how much money you will lose by accepting their offer. Consider consulting with tax advisors to calculate how much you could owe in taxes from the lump sum.

Many states require courts to approve lump-sum deals. If you want to cancel a lump sum transaction, consult with a lawyer about your legal options. A lawyer might be able to help you find ways out of a lump sum deal. 

Contact Edelstein & Nelson for Legal Help

Deciding whether to choose a disability lump sum payment or monthly payments can be difficult. Reach out to a Philadelphia insurance lump sum buyout attorney to find out what your legal options are with a lump sum buyout. All you have to do is call Edelstein & Nelson by dialing (800) 300-0909 for a consultation today about your disability claim. Our experienced team can help you navigate the complex legal steps when dealing with a lump sum offer.