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  1. #1
    Join Date
    Dec 2004
    Location
    tn
    Posts
    2

    Default Lump sum settlements

    I was recently contacted by my insurance company concerning a lump sum settlement. She stated right up front that what they were offering me was their bottom line. Is this a tactic they use to scare me from asking for more in my settlement? They are offering me well below half of what I would draw over the next 19 years. She also said they use a formula and that I was getting 68%. I haven't a clue what that means. Help please. :?

  2. #2
    Join Date
    Sep 2004
    Posts
    758

    Default Lump Sum Settlement

    Is this in relation to the buy-out of an existing structured settlement or annuity?

  3. #3
    Join Date
    Dec 2004
    Location
    tn
    Posts
    2

    Default

    This a long term disability insurance that I have.....so instead of paying me monthly for the next 20 years they want to buy my policy back.

  4. #4
    Join Date
    Sep 2004
    Posts
    758

    Default Negotiating a Buy-Out

    It may well be their "one and only" offer - they are calculating the "present value" of your policy, subtracting a certain amount for profit, and then offering you the remainder as a buy-out. It's also possible, as you suggest, that the value is negotiable but that they want you to accept the first offer.

    You would have to ask them what they mean by "you are getting 68%". For example, does that mean 68% of the present value of the policy, or does that mean 68% of the sum of future payments?

    Depending upon your policy terms, you may be able to arrange a buy-out through a third party. That is, there are some financial services which purchase annuities and structured payments, offering a lump sum to the seller. If you can find such a company, you can compare its offer to that made by your insurance company.

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