Markham & Toronto Long-Term Disability Lawyers Advising on LTD Buyouts

A buyout of a disability claim occurs when the insurance company offers you a lump-sum payment in exchange for you giving up all of your future rights to receive or claim benefits under the policy. In some circumstances, the insurer will propose a buyout “out of the blue” or offer a buyout at our client’s request.

This can be a tempting option for some clients who would prefer to receive a lump sum payment upfront rather than receiving ongoing monthly disability payments. However, it is important to carefully consider the terms of the offer and seek legal advice before accepting a buyout. Mulqueen Disability Law has decades of experience negotiating buyouts of clients’ ongoing long-term disability claims under both group and individual LTD policies.

A buyout of your future LTD benefits is a risky proposition.

A buyout may represent freedom – but is it worth the risk?

Mulqueen Disability Law helps disabled claimants weigh the risks and determine if their insurance company’s proposal is unfair, advises how to respond to a proposal, and explains how the buyout will impact your life and LTD claim in the future.

We will discuss your claim and your medical condition as well as your prognosis and plans for the future. We will also discuss your finances and the risk of no longer having a monthly income once the lump sum payment is spent. We will weigh the cost and benefit of a “divorce” from your LTD insurance company and help you decide if accepting a buyout offer is worth the risk.

We can also help you decide if and when you would like to propose a buyout to the insurance company. The timing of such a request, in the context of your medical condition and the status of your CPP Disability claim, will be important to the success of your proposal and your desired outcome.

Top 5 factors to consider for an LTD buyout

The decision to accept or reject a buyout of disability benefits depends on your individual circumstances and goals, and requires careful consideration and consultation with qualified legal counsel. However, these are our top five factors to consider in all cases.

1. Your financial need

If you need immediate cash to cover essential expenses, accepting a buyout may be a viable option. However, if you can manage your expenses without the lump sum, it may be wiser to keep receiving regular payments to ensure ongoing financial stability.

2. The long-term impact

Accepting a buyout means giving up your future rights to receive disability benefits, which can be a significant loss if you are unable to return to work or your condition worsens or you face new disabilities. The amount offered in the buyout may not be enough to compensate you for the potential loss of future benefits.

3. Your mental health

If your dealings with the insurance company have caused you serious emotional distress to the extent that your condition is aggravated whenever you must communicate with them. Ongoing communication is a requirement under the LTD policy. The only way to end communications is to accept a buyout. The financial risk may be the price you pay for your mental health. You may hope that you recover faster when you are no longer required to communicate with the insurance company. However, there are no guarantees.

4. Your pension, benefits, and employment status

A buyout could result in serious consequences to your pension, if your disability pension is conditional on you receiving monthly LTD benefits. Your employer may be notified and terminate your employment and extended health benefits if you are no long on approved LTD or if they believe you will never return to work due to your disability. The waiver of your life insurance premiums will end and you may lose your life insurance coverage or you may need to convert it into an individual life insurance policy and pay your own premiums at a higher cost.

5. Legal and financial advice

Before accepting a buyout, it’s crucial to seek professional advice from a lawyer or a financial advisor who can explain the legal and financial implications of the decision and help you assess your options.

Mulqueen Disability Law: providing disabled claimants with trusted advice on LTD buyouts in Markham & Toronto

Before accepting or rejecting an LTD buyout offer from your insurance company, it is crucial to consult with qualified legal counsel. As previous counsel for major life and health insurance companies, Courtney Mulqueen has a valuable “insider” perspective into the insurance industry and uses her knowledge to provide unparalled representation to LTD claimants in Ontario.

Mulqueen Disability Law has convenient meeting locations in Markham and Toronto, and also offers legal services virtually for clients who are unable to meet in person. To discuss your LTD buyout with a member of our accommodating team, please contact us online or by phone at 416-900-0368 (or toll-free at 833-363-3LAW [3529]).