How can I ask my insurance company for a contract buyout?


I am on LTD and was approved beyond 2 year mark. I would like to ask my insurance company to buy my contract. How can approach my insurance company? And what should I tell them to ask them to buy out my LTD contract?


Hi Elaine! Likely your best hope at a buy-out is if they cut you off and you can sue. Unless they offer a buy-out I would be hesitant to ask. If they refuse and cut you off then the fact that you asked to be bought out may have poor optics.
Unless you are terminal or have no chance of recovery.


I don’t think they are going to cut me off any time soon. But I could use the money that I can receive from a buyout.

Can I still send them a letter or call them and ask for a buyout saying that I need the money to pay off debt for example?

If you tell them that you need to pay the debt it probably won’t look bad in the court in case if you decide to sue them.


I think many long term disability insurers will not be prepared to consider a buy-out request, and if they are, they may not be prepared to pay an amount that would be acceptable. Insurers would be suspicious regarding the motivation for such a request when monthly benefits are being paid, and will usually only consider paying out the claim for a significantly discounted amount.
Perhaps there are other options that you could look into to get money…or if debt…maybe speak to a trustee.

I think asking for a buy-out is asking for trouble. Some circumstances may warrant such a request…but be careful…


Thank you Ally.

Debt issue was an example. I thought that would be a good start. Not that I have a debt it is that I just want a freedom from insurance company monitoring me. I will continue my treatments even if they don’t watch over me all the time.


I would not go for a buyout. I know it is a hassle dealing with them but the buyout from what I have learned is a lot less than one would have received if she stayed on LTD.


I would be ok with 5 years of LTD pay but would settle for 3 years.


Do a search for “buyout” on this site.
I think you need a lawyer to negotiate because the initial offer might be much less (eg. months).
Is it worth it to you to pay a lawyer to avoid the hassle?
Regardless, see what they offer and then decide what to do.