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Question3

DISABILITY SETTLEMENT Question

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My Disability company is offering a settlement of 50 % of the value of the policy over its lifetime. What is the usual percentage offered.

For example :-  200,000 till age 65

                         100,000 settlement at present. 

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The question is actually both a financial calculation problem and a personality problem.  The fair amount of settlement, called the present value,  is based on the length to time remaining before you would stop receiving payments and the assumed rate of return on the  funds if invested.  That is the calculation part.

 

The other part of the answer is what would you do with the money.  The insurance company would invest a certain amount of cash, the present value, and make period payments to you for a definite period of time.  But the question is whether you would do the same.  If you got the money would you invest it and live frugally off the investment and return on investment. Our would you go to Las Vegas and blow it on the weekend of a lifetime?  Only you can answer the second question. (Most people are better off taking periodic payments.)

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10 minutes ago, RetiredinVA said:

The question is actually both a financial calculation problem and a personality problem.  The fair amount of settlement, called the present value,  is based on the length to time remaining before you would stop receiving payments and the assumed rate of return on the  funds if invested.  That is the calculation part.

 

The other part of the answer is what would you do with the money.  The insurance company would invest a certain amount of cash, the present value, and make period payments to you for a definite period of time.  But the question is whether you would do the same.  If you got the money would you invest it and live frugally off the investment and return on investment. Our would you go to Las Vegas and blow it on the weekend of a lifetime?  Only you can answer the second question. (Most people are better off taking periodic payments.)

Thank you for the advice. Personality wise, I manage money judiciously, but i am not good on the investment side. My dilemma is the anxiety of receiving payments. The Insurance Co is notorious for sudden stoppage of payments. I do not need the payout at this time because of decent savings but just don't trust them. 

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Hi @Question3

 

Welcome to the community and thanks for posting! Looks like you've already gotten some great input from our legal community. You can also check out this article about factors to consider when deciding whether or not to accept a disability settlement. You may also want to consider speaking with an attorney who specializes in disability law.

 

Best of luck!

The FindLaw.com Team

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On 10/4/2016 at 5:18 PM, Question3 said:

Thank you for the advice. Personality wise, I manage money judiciously, but i am not good on the investment side. My dilemma is the anxiety of receiving payments. The Insurance Co is notorious for sudden stoppage of payments. I do not need the payout at this time because of decent savings but just don't trust them. 

 

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