When I was on disability, I received payments on time monthly for 3 years. At that point the insurance company did some calculations. I was a negative on their balance sheet. Calculating how much I'd cost them in a lifetime, they figured about $800,000. They offered me 300,000. The guy who was my case manager wanted me off his sheet, so he "offered" to buy me out. I knew if I didn't accept the offer they would put me under suveillance, and I'd be spending my life trying to prove I'm sick, rather than the reverse.

So I figured that they were taking the 800k and thinking that it had a present value to them of 300,000. This would be true because they could invest at a high rate of return, being a huge insurance company. But me, I could only invest safely at about 4%, in a CD. So, a friend calculated the present value for me at much higher. We negotiated. We ended at a number I was more comfortable at, and the adjuster had me off his red column.

So I'm thinking about Kmeb. Every month she worries about getting kicked off her disability. She gets a set amount per month. If she calculates what that would be if she collected until age 65, that would be the amount she is worth to Unum, in their present value calculations. Maybe, say she gets $1000/month (I don't know.) maybe she's 45. So, for 20 years she gets $12,000/year, that's $240,000. I put that in on the net, and it came out that at 8% over 20 years, that's worth about $50,000 to them.

But at Kmeb's 4%, that's $110,000. That is, if she gets that much from them and banks it at 4%, she could take out 1000/month for 20 years.

Now Im making up these numbers and age, but what I'm thinking is....

If this is the situation, would it make sense for Kmeb to offer to be bought out at a bit less than her present value, say, $90,000. Knowing they think she's only worth $50,000 to them, and maybe Kmeb thinking she can make more than 4%, maybe she could settle for less and do okay, and maybe they'd go for it.

But the one thing I know is this: It would put the money into her hands NOW, and get them off her back.

Do people do this? Do the isurance companies? My insurance company offered me, and they clearly WANTED to buy me out. But I had a cost of living rider and was more costly to them.

Anybody know anything more about this than I do?