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LTD bulk claim settlement???

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    LTD bulk claim settlement???

    Has anyone ever gone thru the process of settling their claim with their LTD carrier by accepting a bulk payment ? Mine mentioned the possibility after their next medical review of file.

    I am guessing that they will review my file, obtain some actuarial impact on the likelihood of me either returning to work or dying before I turn 65, and if likely, at what age. If they think in their favor, they will probably offer to pay at some discounted rate.

    Has anyone been thru this? Is there a standard discount rate they offer? If you accepted bulk payment,what was your experience? If offered and you turned down, was there any subsequent downside? Did the carrier seem to monitor more frequently and second guess your claim?

    I know I need to talk to financial planner/tax accountant on implications of taking a bulk settlement. And have my LTD lawyer review any offer. I have 11 years left on my LTD policy. Having to deal with one less group is so tempting, but I know I need to do due diligence before deciding and look at potential investment return vs. discount rate and also tax implications of bulk payment. Any other thoughts?

    Thanks for any insights.
    DX 01/06, currently on Tysabri

    Hi Pennstater, the attorney you used for your initial LTD claim is a good place to start for advice about a lump sum settlement offer, or they can make a recommendation to someone who specializes in lump sum settlements.

    My guess is the current tax status of your LTD benefits will not change due to the lump sum payment, an IRA account is safe and makes sense long term. IRAs aren't paying interest worth getting excited about, but at least they're not charging a service fee. Yet.

    Here's a link for you, but based on your post it looks like you have the bases covered. This site includes a calculator and examples for discounts the carriers use when negotiating/making an offer for a lump sum payment.

    Let us know how this works out and best of luck.


      Thanks Lonnie. That kind of reinforced what I thought. I most likely won't settle if the offer 50-70% of present value of claim. Interest rates are too low be able to recoup full value of claim. But will see.

      Really interested in anyone else's experience.
      DX 01/06, currently on Tysabri


        Just updating as an FYI. They offered the equivalent of 60% to settle. So I am not taking it. I guess the good news is that they think I am going to live long enough to make it worth the effort to try to settle!
        DX 01/06, currently on Tysabri