Is a long-term disability award paid in a lump sum or over time? (Video)


Long-term disability benefits are payable monthly. The insurance company is allowed to pay the benefit every month; however, if there is a period of backpay because the insurance company has refused to pay, and then is later required to pay by court, then the period of backpay is paid in one lump sum.

However, the court cannot require the insurance company to pay future payments, future monthly payments, in advance. So, the best that the court can do for the individual is to require the insurance company to put him or her back on monthly payments. Now, sometimes when the claim is disputed by the insurance company and it has gone to court, sometimes the insurance company will want to settle the entire claim for both the backpay that’s owed and the future pay that’s owed. Now, that’s up to the individual and up to the lawyer that’s representing the individual, for the two of them to make a decision as to whether it’s in the best interest of the claimant to make a lump sum settlement.

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