Jun 8, 2001
Ok, this is my case. I have been on long term disability since September of '95. In 1996 I qualified for SSDI benefits. From then on my disability benefits became 50 and SSDI covers the other 50, so I did not loose anything. However in the last few days I received a letter from AETNA Us Healthcare, the carrier of my LTD policy offering to enter into a "voluntary restructure agreement, we may be willing to provide you with a single lump sum payment or a defined stream of guaranteed payments in place of your current monthly payments."
"If a restructure were agreed to, your claim would be closed and your long term disability policy would no longer be inforce. You will be required to sign a release stating that you waive all past, present and future claims against the Aetna Life Insurance Co. and your former employer under the coverage you now have. You may not be able to purchase new disability coverage."
I would like your opinion based on what's quoted above. Please help me or recommend what should I do.
Look forward to reading your response. If you wish you can publish my email so other people that may have had this experience share information with me, email@example.com.
Thank You so much!
Response from Ms. Franzoi
Long term disability insurers will in certain situations offer a disabled individual who is receiving a monthly disability benefit the option to receive a single lump sum payment in lieu of continuing to receive a monthly disability benefit. Whether or not this is a good offer depends on several factors - the amount the insurer is offering, your health status, other financial resources and your monthly expenses. If it is enough money to invest and provide you with the stream of monthly income you will need, it might be good. However, if you were spend this entire lump sum, would you have the financial means to maintain your needs? You really need to evaluate the amount being offered, what other financial resources you have and whether or not you think you might be able to return to the workplace. You should find out the amount that is being offered and then contact a financial planner to evaluate your monthly expenses and monthly income now versus what you would have if you were to take the lump sum and invest it. This would help you assess whether or not it would be an option you should take.
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