Settlement agreement

applepie1974

Hi . I’m on from work over 9 yrs with disability. I’m on phi or income protection paid monthly thru my employer along with healthcare and pension. I had my yearly review with income insurance company and they broached the subject of a settlement exit figure as in who I be open to discussing. 

They have agreed that I’m unlikely to return to my job and I have 16yrs remaining on my income protection payment with them thru employer. 

Anyone have any experience of what kind of settlement % is usually offered to walk away . 

Thank you . Appreciate any feedback 

DullGreyGuy

In principle it should be the net present value of the future claims payments considering inflation/discount rate and longevity. The later could be normal or reduced depending on the nature of your condition. 

It'll also be important for you to establish if the lump sum will be taxed or not

applepie1974

Thank you . I know I’ll have to seek legal and tax advice if the time come . It was just the first time in 9 yrs where the mention of a settlement exit lump sum was broached by the insurance company. They did mention they need to discuss with my employer their client but I’m sure my employer would be happy to have me off the head count as I’ve 16yrs left on my income protection . 

Thank you for taking the time to respond. 

Brie

Other things to think about - how good are you at handling money?  No point in having a large lump sum if you aren't able to deal with it to cover your income in the future. 

What other money are you receiving from anywhere?  Is there any income related benefits you are getting?  Or might be eligible to get in the future?  

Is this accruing you any benefits, i.e. NI payments, that will increase the amount of state pension you will eventually get?

What other work benefits are you getting?  Still in the employer's pension scheme??  

Basically you need to look at everything that is happening now and will happen in the future to know if this is the right deal for you.

applepie1974

thank you Brie . I get family health care along with 70% of wage minus my invalid payment. . 

We are mortgage free thankfully so only a car finance x1 . If I left employment I would be in receipt of my weekly invalidity but would loose out on my monthly income payment plus healthcare care