The answers to your questions will depend on two things: 1) The specific LTD Benefits offset provisions in your LTD policy and 2) the essential nature of the payments received from the employer.
The only thing I can say in general, is that insurers are normally concerned with gross payments, rather than net payments. But this depends on whether your LTD benefits are taxable as well. Again, this will turn on the wording (or lack thereof) in your LTD policy.
I always recommend caution when trying to “structure” any type of settlement or payment with view to avoiding taxes or LTD offsets. Make sure the payment is done within the legal bounds and the essential nature of the payment is not being misrepresented in any way, in order to defeat a LTD offset or tax consequences. Courts are always concerned with with essential nature of things, rather than how it appears on the surface.
Be very careful about accepting advice from people based on their experiences because their situation may be very different because of different LTD policies and nature of the payments from employer. You would need to get specific legal advice on how the specific settlement offered to you would affect you based on your LTD policy.
David Brannen
Disability Lawyer with Resolute Legal
The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.