Long Term Disability Settlement Lawyers

Helping You Evaluate Long Term Disability Settlement Offers With Confidence

If you have received a settlement offer from your disability insurance company, you may be wondering whether accepting a lump sum payment is the right decision. The long term disability settlement lawyers at Hawks Quindel can help you understand what your claim may be worth, what rights you may be giving up, and whether the insurance company's offer fairly reflects the value of your benefits.

Many people assume that a settlement offer represents the insurance company's best and final offer. Actually, settlement offers are often based on the insurer's assessment of risk and financial exposure—not necessarily on what is in your best interests. Once you accept a settlement and sign a release, you may permanently give up the right to receive future disability benefits under that policy.

Our long term disability team helps individuals throughout Wisconsin evaluate settlement offers, negotiate with insurance companies, and make informed decisions about their future. Whether your benefits have already been approved or your claim is being challenged through an appeal or lawsuit, understanding the true value of your claim is critical before agreeing to a settlement.

Why You Should Choose Hawks Quindel For Your Long Term Disability Settlement Claim

Long term disability settlements involve much more than simple arithmetic. The value of a claim depends on medical evidence, policy language, future benefit projections, tax considerations, offsets, and the likelihood that benefits could be terminated in the future. 

Evaluating these factors requires experience with disability claims and a thorough understanding of how insurance companies approach settlement negotiations. The disability attorneys at Hawks Quindel regularly represent Wisconsin residents facing long term disability disputes and understand how these claims intersect with other important benefits, including Social Security Disability and workers' compensation benefits.

As attorney William Parsons explains, one advantage of working with Hawks Quindel is that the firm handles multiple workplace-related benefit claims under one roof:

"We can take a holistic approach, because we have all of it under one roof and we can get all of the attorneys on the case and the cases in the room together to figure out what's best for the client."

That collaborative approach can be particularly valuable when evaluating a settlement because disability benefits often affect other sources of income and benefits. When you partner with the long term disability lawyers at Hawks Quindel, you benefit from:

• Attorneys experienced in long term disability claims and appeals
• Guidance on how settlements may affect other benefits
• Careful review of policy language and release agreements
• Strategic settlement negotiation experience
• Trial and litigation advocacy if a dispute cannot be resolved by settlement

Our goal is to help you understand the full picture before making a decision that could affect your financial future for years to come.

When Are Long Term Disability Settlements Offered?

Settlement opportunities typically arise at one of two points during a long term disability claim.

• The first situation occurs when your claim has already been approved, and you are receiving monthly disability payments. At some point, the insurance company may contact you to offer a lump sum payment in exchange for closing the claim permanently.
• The second situation arises after a claim has been denied and litigation has begun. In these cases, the insurance company may seek to settle the dispute before a court issues a decision.

While both situations involve settlement discussions, the considerations can be very different. Someone currently receiving benefits may be evaluating whether to trade ongoing monthly income for a single payment. Someone involved in litigation may be weighing the risks and uncertainties of continued legal proceedings against the certainty of a negotiated resolution.

In either situation, it is important to understand that the insurance company has already conducted its own analysis to determine the claim's value. That analysis is designed to protect the insurer's financial interests—not yours.

What Is a Long Term Disability Policy Buyout?

A long term disability policy buyout is a specific type of settlement in which the insurance company offers a lump sum payment to permanently end its future obligations under the disability policy. Unlike a settlement that resolves a disputed or litigated claim after benefits have been denied, a policy buyout often occurs when a claimant is already receiving monthly disability benefits.

In a buyout, the insurance company is essentially offering to purchase its way out of the ongoing contractual relationship. In exchange for a lump sum payment, the claimant agrees to give up the right to receive future monthly benefits, future cost-of-living increases, and any other rights associated with the policy.

Because a buyout involves the surrender of future contractual benefits that may continue for years or even decades, it requires careful evaluation. Factors such as future eligibility, life expectancy, inflation, tax consequences, benefit offsets, and the likelihood of continued disability all play an important role in determining whether a proposed buyout fairly reflects the value of the claim.

Before accepting a disability policy buyout, it is important to understand not only what the insurance company is offering today, but also what benefits you may be giving up in the future. We can review the buyout offer and explain your rights and options before you make a decision.

Why Insurance Companies Offer Lump Sum Settlements

Many people wonder why an insurance company would offer a settlement at all. The answer is simple: financial certainty.

Long term disability claims often remain active for many years. During that time, insurers must continue reviewing medical records, monitoring eligibility, processing payments, and evaluating ongoing risk. Offering a lump sum settlement allows the insurance company to permanently eliminate future obligations and close the file.

From the insurer's perspective, a settlement may help avoid future benefit payments, administrative costs, litigation expenses, further medical reviews, and the risk that a claimant remains eligible for benefits longer than expected

That does not mean settlements are inherently unfair. In some circumstances, a settlement may provide meaningful advantages to the claimant as well. The key is understanding whether the proposed amount fairly reflects the value of the claim being resolved.

How Insurance Companies Value Long Term Disability Settlements

Determining whether a settlement offer is reasonable requires looking beyond the dollar figure itself. Our experienced long term disability benefit lawyers can review your situation and explain what your claim may be worth. Of course, the insurance company will likely value your claim differently.

Insurance companies generally begin by estimating the value of future benefits that could potentially be paid under the policy. They apply various assumptions regarding life expectancy, future eligibility, investment returns, offsets, and other factors to calculate a present-day value.

Several factors can significantly affect the value of a settlement offer, including your age, medical condition, policy terms, expected duration of benefits, and eligibility for other disability programs.

Considering Present Value and Future Benefits

One of the most important concepts in disability settlements is present value. If your policy would pay monthly benefits for many years, the insurance company generally does not offer the full amount of those future payments. Instead, it calculates what those future payments are worth today.

The theory behind present value is that money received now can potentially be invested and earn returns over time. Because of that, a dollar received today is considered more valuable than a dollar received years from now.

While this principle is widely accepted, the assumptions used in these calculations can have a significant impact on the final settlement amount. Small differences in projected investment returns or discount rates can dramatically change the insurer's valuation.

Determining Life Expectancy and Mortality Assumptions

Another major factor in long term disability settlement negotiations is life expectancy.

Most long term disability policies provide benefits until a specified age, often age 65 or Social Security retirement age, as long as the claimant continues to meet the policy's disability definition. However, insurance companies recognize that not every claimant will live long enough to receive every potential payment.

As a result, insurers frequently use mortality tables and life expectancy projections when calculating settlement offers. These calculations can become particularly important when a claimant has a serious medical condition that may affect longevity. 

Some conditions may reduce life expectancy, while others may have little or no impact despite causing a disabling impairment. Because every situation is different, we work to determine how the insurance company reached its conclusions and whether those assumptions accurately reflect your circumstances.

How Social Security Disability and Other Benefits Affect Settlements

Many long term disability claimants also receive Social Security Disability Insurance (SSDI), workers' compensation benefits, disability retirement benefits, or other forms of income replacement. These programs often interact with one another and may offset your benefits.

An offset allows one benefit provider to reduce payments based on benefits received from another source. For example, a long term disability insurer may reduce monthly payments if you receive Social Security Disability benefits. Similar coordination issues can arise with workers' compensation claims.

These interactions can significantly affect the value of your settlement. Our team understands the interplay between benefits and works to protect your financial future.

As attorney William Parsons explains:

"There's also a lot that goes into sequencing in these kinds of cases. We coordinate clients’ benefits so that they pay out the most because there are offsets between workers' compensation and Social Security. There are offsets between Social Security and long-term disability."

Because settlements may affect multiple benefits simultaneously, evaluating the full financial impact often requires looking beyond the disability policy itself.

What are the Tax Consequences of a Long Term Disability Settlement?

Many people focus on the settlement amount without considering how taxes could affect what they actually receive. Whether disability benefits are taxable often depends on who paid the insurance premiums and how those premiums were paid. In general, benefits may be tax-free if premiums were paid with after-tax dollars, by the employer, or through pre-tax payroll deductions

A large lump-sum payment could create different tax consequences than receiving smaller monthly payments over time. Because tax situations vary significantly from person to person, your settlement decision should be based on a clear understanding of the potential tax implications. Contact our long term disability benefits lawyers to learn more.

Cost-of-Living Adjustments Can Significantly Affect Value

Some long term disability policies include cost-of-living adjustments (COLAs). These provisions increase benefit payments over time to help offset inflation and rising living expenses.

While a cost-of-living adjustment may appear modest in any given year, the cumulative effect can be substantial over a long benefit period. A claimant who may be entitled to receive benefits for many years could see significant increases in total future payments because of these adjustments.

For that reason, any cost-of-living provision should be carefully evaluated when assessing whether a settlement offer accurately reflects the potential value of future benefits.

Considering the Value of Ending the Relationship With the Insurance Company

Not every factor in a settlement evaluation is purely financial. Many disability claimants spend years dealing with requests for medical records, ongoing reviews, surveillance concerns, independent medical examinations, and periodic challenges to their eligibility.

Even individuals who are currently receiving benefits may worry that the insurance company could terminate those benefits in the future. Accepting a settlement may provide certainty and finality that some claimants find valuable.

Potential advantages of a long term disability settlement may include:

• Immediate access to funds
• Elimination of future claim reviews
• Avoidance of continued disputes with the insurer
• Greater financial flexibility
• Reduced stress and uncertainty

However, those benefits must be balanced against the loss of future monthly payments and other rights under the policy. We can explain your options and help determine whether accepting a settlement is in your best interests.

What Rights Are You Giving Up When You Settle?

One of the most important aspects of any disability settlement is understanding what you are agreeing to give up. In most situations, a settlement agreement permanently ends your claim under the policy. 

Once the agreement is signed and the settlement is paid, you generally cannot return later and seek additional disability benefits under that claim because settlement agreements often contain provisions addressing:

• Release of future claims
• Confidentiality requirements
• Tax reporting obligations
• Payment terms
• Waivers of future benefits

These documents are often written by attorneys representing the insurance company and may contain legal language that is difficult to interpret without assistance. We can help you understand exactly what rights you are giving up in addition to the settlement amount itself.

Should You Accept a Long Term Disability Settlement?

There is no universal answer to this question. For some individuals, a lump sum settlement may provide financial flexibility, certainty, and peace of mind. For others, continuing to receive monthly benefits may provide greater long-term value and security.

Factors that may influence your decision include:

• Your age
• Your health condition
• The strength of your medical evidence
• The amount of the settlement offer
• Tax considerations
• Financial needs
• Other available benefits
• The likelihood of future disputes with the insurer

What makes sense for one claimant may be entirely different for another. Our experienced team can help you make a settlement decision based on a careful evaluation of your specific circumstances rather than general rules or assumptions.

How Can Medical Evidence Influence Settlement Value?

Medical evidence often plays a major role in determining how an insurance company values a disability claim. Strong medical support may increase the likelihood that benefits will continue into the future, which increases the potential value of a settlement. Conversely, weak or inconsistent medical evidence may reduce the insurer's perception of risk.

The disability attorneys at Hawks Quindel regularly help clients evaluate medical records, physician opinions, and vocational evidence when assessing disability claims. Well-supported medical evidence often becomes one of the most important factors in determining both claim success and settlement value.

How the Hawks Quindel Team Helps With Long Term Disability Settlements

The disability lawyers at Hawks Quindel help clients understand both the legal and practical consequences of settlement offers. Depending on your circumstances, our team may:

• Review your disability policy
• Evaluate the value of future benefits
• Analyze offset provisions
• Assess tax considerations
• Review release agreements
• Negotiate with insurance companies
• Coordinate strategy with Social Security or workers' compensation claims

Because disability claims often involve multiple benefits and overlapping legal issues, our ability to collaborate across practice areas can provide important advantages when evaluating settlement opportunities. Our goal is to help you make an informed decision based on your circumstances—not the insurance company's priorities.

Frequently Asked Questions About Long Term Disability Settlements

Speak With Our Long Term Disability Settlement Lawyers Today to Learn More

A long term disability settlement may represent one of the most important financial decisions you make after becoming disabled. Before accepting a lump sum payment, it is important to understand the true value of your claim, how the settlement may affect other benefits, and what rights you may be giving up.

The disability attorneys at Hawks Quindel help individuals throughout Wisconsin evaluate settlement offers, protect their rights, and make informed decisions about their future. Whether you are considering a voluntary settlement or negotiating during litigation, our team can help you understand your options.

Contact us today by calling our Madison office at (608) 257-0040 or our Milwaukee office at (414) 271-8650, or fill out our confidential contact form.