Trying to calculate a long term disability settlement amount can be difficult — especially if you aren’t a math guru, but you’re in luck! We built this long term disability settlement calculator to make your life easier! All you have to do is fill in the required fields, and you’ll be provided with a general estimate of how much you can expect to receive.
If you have any questions about how to use this calculator or want to discuss your results with our team, give us a call at 888-480-9050 for a free consultation.
Disclaimer: This Long-Term Disability Settlement Calculator, provided by Resolute Legal Disability Lawyers, is for general informational purposes only and does not constitute legal advice. Results may not accurately reflect the specifics of your case. Use of this tool does not establish an attorney-client relationship, and Resolute Legal makes no warranty regarding its accuracy or completeness. Consult with a qualified attorney for advice tailored to your situation. Reliance on this calculator is at your own risk, and Resolute Legal is not responsible for any loss or damage resulting from its use.
Long term disability payout calculator and settlement calculator
There is no need to worry about formulas or figuring out how to calculate long term disability settlement, as our long term disability payout calculator will take care of all the heavy lifting for you.
Try it out for yourself!
Number of Months to age 65:
Total Past Payments Owed:
Present Value Future Payments:
Total Past and Future Payments:
Settlement Value:
How to use this as a long term disability settlement calculator
The great thing about our calculator is it can be used to calculate a long term disability settlement as well as a long term buyout.
What’s the difference? While these terms are used interchangeably, we typically refer to a long term settlement as a situation where you, the claimant and the insurer come to an agreement — through the context of litigation — as to how much your benefits are worth. This includes past benefits owed, also known as arrears AND future benefits.
On the other hand, a long term disability buyout usually only considers future benefits. And it typically doesn’t take place in the context of a claim denial. To learn more about LTD buyouts, check out our article Buyout of a Disability Insurance Policy.
To use this as a long term disability settlement calculator that calculates past and future benefits, simply follow the instructions below:
1. Input your date of birth, the current date, monthly benefit amount and the number of months owing
This step is pretty self-explanatory, but please fill in your birthdate, the date the calculation is being made, and the amount of money you were receiving in monthly long-term disability benefits.
For the number of months owing, figure out when you received your last long term disability payment and find the difference between that date and today. If you don’t have any payments owing, meaning your payments weren’t terminated, just put a zero in the ‘Months of Past Payments Owing(#)’ field — leaving it blank won’t work.
2. Input the present value discount rate
The what? If you haven’t heard of the term present value, don’t worry; it isn’t something that comes into most people’s daily lives. However, the concept basically states that money today is worth more than the same amount in the future. So, getting $500 today is more lucrative than ten years from now. Why? The reason for this is that someone can invest $500 today and presumably earn a return rate of over the next ten years. Thus, present value takes into account any interest rate an investment might earn.
Our calculator allows you to adjust for present value. You can use the sliding scale to increase or decrease the percentage anywhere from 2 to 5 percent.
If you are unsure of what percentage to pick, we recommend selecting 3 percent as this is the most common present value discount rate for long term disability settlements.
3. Input the Settlement Discount
What is the settlement discount rate? The settlement discount recognizes that the person will have to accept less than the full value to get a settlement with the insurance company. The discount amount will depend on a variety of factors, but our calculator allows you to choose different settlement discount percentages ranging from 25 to 90 percent. As you increase the settlement discount percentage, your settlement value will decrease.
If you have an idea of what your settlement discount percentage may be, put that in. Otherwise, play around with the sliding scale based on the factors below that apply to your situation.
Factors that affect the settlement discount:
- the total present value of past and future benefits
- your life expectancy
- their history of settling other cases like yours
- the definition of disability in the policy
- pre-existing conditions
- insurance coverage issues
- your credibility
- the strength of your medical evidence
- your compliance with medical advice
- your attempts to return to work
- your work history and transferrable skills
- surveillance
- your age
- the quality of your lawyer
Further reading: Appeal Long Term Disability Denial & What to Expect at a Long Term Disability Lawsuit in Canada.
How to use this as a long-term disability buyout calculator
To use this as a long term disability buyout calculator, simply follow the instructions above, but put a zero in the “Months of Past Payments Owing (#)” field.
What our LTD calculator tells you
It can be confusing to figure out what each calculation means. Read the sections below to understand what our LTD calculator Canada is telling you.
Number of Months to age 65
This one is pretty self-explanatory, but it merely calculates the number of months between today and your 65th birthday. Why is this important? Most long term disability Canada benefits will cease at age 65, so knowing how many months are left in your policy can be helpful. In addition, this calculation is needed to figure out how much your future benefits are worth.
How is it calculated? This is calculated by counting the number of months from [Current Date +1 month] to the user’s 65 Birthday.
Total Past Payments Owed:
If you have been denied benefits, this calculation can show you how much money the insurer owes you from the date you were denied until today. So, if the insurer decided to approve your claim instead of offering a settlement, this is the amount you could expect to receive for the months you were denied.
How is it calculated? This is a simple multiplication of “Monthly Payment Amount” by “# Months of Past Payments Owing” to the “Current Date.” This gives the monetary value of the past disability payments owed to the user from the date the benefits should have been paid to the date of valuation.
Present Value Future Payments
This is a present value calculation. It calculates the present value of getting a series of monthly payment amounts for a number of months to age 65 using the present value discount rate. This calculation will come up with a dollar figure that will be less than if the person just did a straight calculation of multiplying the monthly payment amount by the number of months to age 65, which is what most people do when trying to figure out the total value of the future monthly payments they are owed. This calculation should give you a somewhat realistic estimate of the value of your future LTD payments if you were to accept a settlement or buyout.
Total Past and Future Payments
If you want to know how much your past benefits and your future payments are worth without the settlement discount, this calculation is for you. It simply adds ‘Total Past Payments’ with ‘Present Value of Future Payments.’
Settlement Value
Settlement value refers to how much the insurance company is willing to pay. Calculating settlement value is the hard part. Ultimately, the settlement value is based on several factors, including the insurance company’s perception of its own risk of losing. In other words, what do they view as their chances of winning the case?
For example, if the insurance company believes they have a 75 percent chance of success, then the settlement value of your case is 25 percent of the total value of benefits. If the total value was $100,000, then they would be willing to settle for $25,000 ($100,000 x 25%). This is an oversimplification, but is generally how it works.
In arriving at the settlement value, the insurance company will consider the following factors:
- the total present value of past and future benefits
- your life expectancy
- their history of settling other cases like yours
- the definition of disability in the policy
- pre-existing conditions
- insurance coverage issues
- your credibility
- the strength of your medical evidence
- your compliance with medical advice
- your attempts to return to work
- your work history and transferrable skills
- surveillance
- your age
- the quality of your lawyer
While the insurance company ultimately determines what they are willing to pay. You can influence their decision by affecting some of the above factors. A good lawyer will focus on building your case in a way to maximizes what the insurance is willing to pay.
Here at Resolute Legal, our long term disability lawyers have negotiated thousands of LTD settlements and buyouts. We can help you get a result you can be happy with, whether that is a claim approval, settlement or buyout. Call us today at 888-480-9050 to get started today!
Book a Free Case Evaluation
Our exclusive Long-Term Disability Settlement Calculator, powered by Resolute Legal, provides a glimpse into what your settlement could entail. But why stop there? Take the next step and book a FREE consultation with one of our disability claim consultants to decipher the nuances of your results, understand what they mean for you, and kickstart the journey to securing a fair settlement or buyout.
Don’t navigate this process alone—let us guide you. Schedule your free consultation today and empower yourself with the knowledge and support needed to make informed decisions about your long-term disability claim. Your brighter future awaits—start the conversation with Resolute Legal now!