Long Term Disability Settlement For Lump Sum

John Darer • May 13, 2019

Avoid Lump Sum Disability Settlement | The Math Sucks!

Disability Settlement

 

WARNING! Taking a lump sum disability settlement from your employer or your employer paid long term disability (LTD) insurance company could be a very big financial mistake.

1.Employer paid disability insurance payments are taxable.
2.When you are receiving employer paid LTD benefits, payments are taxable in the year received, whether insured or not.
3. The lump sum you would be paid will be fully taxable if the LTD insurance is an employer paid perk.
4. A lump sum settlement is taxable in the year received.
5. A lump sum settlement could push you and your spouse (if your spouse works and filing jointly) into a higher tax bracket.
6. A lump sum payment could impact asset sensitive public medical assistance to the extent you are receiving it and your expected family contributions for financial aid.for your children's edication
7. In arriving at the lump sum that you are being offered the employer or LTD insurer is using a discount rate to come up with present value of your future payments. The discount rate being used is probably taken from a government or corporate bond index and doesn't take into account the taxes that would be due on a lump sum settlement.
8. In addition to taxes, if you hire a lawyer to represent you the lawyer will be entitled to legal fees and expenses, subject to your retainer agreement with the lawyer or law firm.
9
. Failure to take this into account in taking a lump sum settlement, could be a financial disaster for the employee/claimant, possibly leaving a net of only 1/3 of the settlement and little hope of replacing the income replacement they had previously enjoyed. Don't be fooled!

Structured Settlements for Employer Paid Disability Claims or Employer Paid LTD Insurance Claims

A structured settlement, funded using a non qualified assignment mechanism or periodic payment reinsurance, enables the payee to establish an income stream that is similar to what the employee/claimant was receiving while receiving payments from the employer or employer paid disability insurance.

What if the Employer/LTD Insurer Will Not Agree to a Structured Settlement?

If an employer and insurers are unwilling to sign non-qualified assignment or enter into a reinsurance agreement, then the employee/claimant should seriously reconsider the value of the employer's or employer paid LTD insurer's lump sum settlement offer, because the settlement math truly sucks.

Do The Disability Lump Sum Settlement Math
Discount 1 The higher discount rate used by the employer/LTD insurer which fails to take into account taxes you will pay PLUS
Discount 2 The discount from your attorney fees PLUS
Discount 3 The discount from the taxes you actually pay

Discount+ Discount+ Discount=SUCKS








 

most infomative structured settlement websites
By John Darer August 26, 2025
The 4structures.com website is one of the most comprehensive structured settlement resources, particularly for those who want detailed, expert-level information, according to Google AI
most informative
By John Darer August 22, 2025
Based on Grok's review of prominent sites as of August 2025, 4structures.com (including its associated blog at structuredsettlements.typepad.com) stands out as the most comprehensive. Run by structured settlement expert John Darer, it offers detailed guides, and specialized insights
fountain
By John Darer August 17, 2025
Retained asset accounts for life insurance beneficaries, are temporary accounts that earn interest, give you time to breathe and give you time to figure it out.. Retained asset accounts are pay nterest from the date of death to date of settlement of the claim as a general practice,
knuckles
By John Darer August 16, 2025
How to avoid a "Knuckles Sandwich" when entering into settlement of claims or lawsuits involving taxable damages, or elements of taxable damages. What is the intent of the Payor? What happens if the intent of Payor is not clearly set forth in the settlement agreement?
structured  settlements
By John Darer August 15, 2025
Structured settlement annuity issuers have stood the test of time, which is crucial if you're depending on them to pay you stable income for a long time or the rest of your life or pay your beneficiaries . For Structured settlement annuities . Call John Darer at 888-325-8640
New Y
By John Darer August 14, 2025
While rising yields have narrowed the gap for defendants in New York CPLR 50A and 50B projections, plaintiffs can still " fly inverted" and get plenty of "lift" when negotiating settlements by using savvy settlement experts
baseball caps of many colors
By John Darer July 29, 2025
The cap rate on index linked structured settlement annuities is a limit set by the insurance company on the maximum interest rate that can be credited to the annuity based on the performance of the underlying index that also helps provide the downside prtection..
longevity road
By John Darer July 28, 2025
Do your financial resources give you enough road, or will the road run out before you do? A structured settlement annuity helps mitigate the risk of outliving your savings, no matter how long you live. A structured settlement can inlcude one or more customized payment streams and types.
USAA structured settlements
By John Darer July 16, 2025
USAA Life Insurance Company, an A++ rated insurance company, issues structured settlement annuities with 1%, 2% and 3% COLAs. USAA Life structured settlements are exceptionally compatitive on lifetime benefit payments with long duration certain periods for ages under 35.
MetLife Structured Installment Sales Now Available in New York
By John Darer July 8, 2025
Owners of highly appreciated NY businesses or NY real estate may benefit from a structured installment sale tax deferral program as an alternative to a 1031 exchange. MetLife's structured installment sale program is now available in NY and in all 50 states. Call 888-325-8640 for more info
More Posts