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?

Thanks for posting this - this year's review so far has been a nightmare (and is continuing right now as we speak) - every year my docs tell my LTD (long term disablity private company) that I'm not getting better - but they pull every stunt in the book to make my life miserable and threaten to cancel, and bottom line know they can cancel based on their "own docs review of my records" and often do because a case typically takes three years to get to court and since I have a group policy - there is no cost of living increase and again, because its a group policy, if I did have to go to court - no punitive damages.... but the bottom line - its 2/3 of my monthly income.... and losing it would be catatrosphic to me... the company counts on people giving up fighting them - many are too sick or just really dont need it... I cant give up..... Liza Jane is right on here - and would appreciate any feedback on her question! (I'm right in the middle of a review right now - and the stunts they have pulled to date to try to deter just the collection process of data and doctor statements so far is absurb - but bottom line is - they write the checks!)

Financial advice,and investing. Although I know the Australian system only. Karen PM me if you wish. I need more details as I need to calculate the figures.

Hi - just sent you a PM

Karen,
My husband is very good with this type of thing. He does our investments and taxes for senior citizens so he has a lot of knowledge on this. I'll ask him to weigh in on this. I can't even balance a checkbook. You know who has the knowledge and who has the beauty in this family. Seriously, I'll ask.

Billye

I could as my brother.in my family everyone asks my brother. And
this family so there you go. Me well a few years ago i could give
you a shot,but with the PN in my hands,i would miss you and get
your neighbor.
Karen i know personally how hard it is and what your going throug,
well, i've been going this crap as well and it's stressful ,hard, and
scary. It's so sad we live in a world of very sick people have
to prove there sick. I'm sorry you have to go through this. Bob
lived most of his life in the LA area,i asked how the heck do you
get around he said it's not easy. But he also said you are near vey
good hospital's,he worked in 1 for 25 yrs. If i could drive,i don't
know if i could do it there. I used to go to my Dr. in my Wheelchair,
until she found out and made me quit,she lives across the street
i think she should drive me then. I wish with all my heart i could
make it better.
Billye i know what you mean about a big screen Sjoren's gives me
the blurs. Best wishes and my brother would help,if you need him,
But Ozzy is so good,i'm like Billye, but her husband sounds like a
very nice guy. Out of alll the tests that one is awfull.
Wow this is a long no help note. Sorryyyy Sue

Im just hoping that all the right heads weigh in on this one. Karen, I know you can't possibly do without the income; that goes without saying. The only question is, could you get Unum to give you enough money so that if you put it in CDs you could withdraw the same amount each month as you get now, and not have to deal with them.

That decision depends upon two things: First, would they go for a settlement? Second, what is the "present value" of the settlement amount and life expectancy that you want to work with, as well as them.

When I was working this out for myself, I had lots of help with the numbers, and the assumptions, and was able to get a settlement which seemed reasonable, compared to what I was going to have to go through for life, and what they would be paying me.

So, I hope Aussie and Len (Silverlady's hubby) are able to help you on this.

My guess is that you have to figure you'd not live to 65 to come out ahead of them. If you assume you live to 64, you can win. Each year you take out of your life expectancy, you do better by settling with them. But that's not a fun way to think about it.

Anyway, it's probably time for this discussion to go private, except in the most general terms.

My husband has had a ridiculously busy afternoon and day. This is his Kiwanis meeting day and then he delivers Meals on Wheels to shut-ins. The Texas heat and all of the hurrying exhausts him and he was really tired this afternoon. He did look at L.Jane's theory and agrees with what she is saying. He will look at it in depth and give me a written note to contribute tomorrow. Hope Aussie has been able to help some. And I agree with LJane. We will discuss this only in general terms on the forum. Facts, figures and her decision need to be in private conversations or pm's. Thanks to all who are helping.

Billye

Here it is, I'm not going to apologize. It's just been one of those days. He looked at Liza Jane's message and thought about what he knows about the situation. It's not a lot unfortunately. But his thoughts seem to agree with Liza Jane's, ...."I agree with Jane's analysis and parameters. What I don't know are the insurance policy/company particulars and how they apply. Another thing I don't know is what is the insurance companies estimation on longivity of kmeb. If they think she is seriously ill and will only survive five years instead of 20, they have less incentive to do a lump sum settlement based on her reaching 65 years. There are too many things not known to us to make a good evaluation of the probability of a settlement to avoid the annual evaluation problem."

Sorry we were not more helpful. Just too many unknowns. But the gist of the idea is here.

Billye