Unum group payment protection buyout offer

Roc123

Hi

I had an injury at work a few years ago and after many spinal operations been on long term sick leave since. I have been getting a monthly benefit of 50% my basic salary from unum. I have recently been offered a lump sum settlement agreement to finish my claim and sign away my employment rights also end my employment. My concerns are the amount offered isn't life changing does anyone know the implications of rejecting the offer? And do unum normally offer a low ball offer first and could offer more as I'm 37 years old and the cover would see me to retirement age if necessary. I'm not fit enough yet to take the money and run then go out and get another job and I would require retraining as I could no longer do my occupation. I also have a mortgage to pay off and 2 kids. HELP!!

paddyandstumpy

What does their policy wording say?

ACG

Income protection is not a lottery win, it is something that allows you to pay your bills without worrying.

How much do you get now?
How much have they offered you?
Do you claim any state benefits?

dunstonh

My concerns are the amount offered isn't life changing does anyone know the implications of rejecting the offer?

It isnt meant to be life changing. It is a way of the insurer pricing out their liability now instead of spreading it over the years. Sometimes, in the long run, the insurer ends up out of pocket (say if person dies early on or recovery happens and you are able to go back to work). Other times, the person does not recover and lives through to retirement and may get more keeping the monthly income going.

For the insurer it is all about them wanting to end an ongoing liability. Whether you end up worse off or better off is not an interest to them. However, if you reject it, they have already priced this priced liability and will be happy to continue paying monthly as they originally agreed.

You need to look at your expected recovery period and decide whether a bird in the hand is worth two in the bush.

Roc123

I currently get 1,000 p/m before tax etc they have offered me 50k which would have to be taxed after the first 30k.
I currently get basic pip and industrial injuries benefit. If I accept I will then also loose my job which employer is holding open for me and after still being injured and off for so long I think I would find it hard to get any job.

ACG wrote: »

Income protection is not a lottery win, it is something that allows you to pay your bills without worrying.

How much do you get now?
How much have they offered you?
Do you claim any state benefits?

Roc123

Thank you for the advise😊 So if they have priced it do you think this mean they won't stop paying if I reject the offer I want the security of monthly payments while I recover and work through my rehab to get back to my job which I enjoyed before my accident. I still need to support my young family

molerat

If the cover is likely to see you through from 37 until retirement age then £50K seems an incredibly low figure, just over 4 years. You obviously need to investigate on what grounds the payments can be terminated - does it only cover you whilst "employed" ?

dunstonh

The figure is low but that is probably as the insurer feels, based on the medical information they have, that a recovery and ability to return to work is likely to happen.

If you reject the offer, then it will continue to pay monthly until the insurer feels no longer meet their illness criteria.

Roc123

Yes cover only applies whilst I'm employed but my employer is happy to keep my job open and support and rehabilitate me back to my job.

Roc123

The insurer won't speak to me as their client is my employer and I recieve the payments as a employment benefit. So I'm only going on what my HR dept have been telling me.

Chris_Pollard

Roc, I'm sorry to hear of your situation. You seem motivated to return to work, but your employer's insurer clearly feels this is unlikely as they have offered to commute your monthly benefit. Perhaps your employer also feels that this is the only way they can potentially recruit a replacement as technically you are still a "headcount".

The insurer should also have offered to provide legal services to help you in your decision making. You would need to bear in mind the impact that a lump sum settlement might have on any existing benefits you receive. I'm afraid I don't know if it would.

You're young, I have seen many instances where the lump sum has been used to help rehabilitate into a different career; even funding a university degree. This is a big decision and it will depend on your medical prognosis. Refusing the settlement now wouldn't impact your entitlement to the benefit. Perhaps your insurer might be willing to fund a specialist rehabilitation report - including a transferrable skills analysis. This might help to evidence what you can do now, and might be able to in the future, and what skills you possess that could be used in a different line of work.

Whilst you're not granted direct access to the insurer they have access to some of the best specialists in the UK, I'm sure that working together with your employer will provide you with access and opportunities you wouldn't have had your employer not selected UNUM as their partner.

Very best of luck.