Sun Life LTD offering Buy out before 2 yr mark



By the sounds of it this sounds like a somewhat rare case for me. I have been on LTD for almost 2 years (it will be 2 yrs in july) and they just called today and offered me a lump sum of 1 yrs pay (20k) to settle my case before my review. Most of the reviews and questions I have read about people being offered settlements after this point. I am wondering why they are trying to give me a settlement now? I am only 31 years old and am worried that they will say that I can do any job not just my prior profession. But at the same time I don’t want to be low-balled. Can I counter their offer as well? I have 2 weeks to respond


Sunlife is releasing their first quater financial results early May. Probably they just need their earnings to look better so they’re trying to close some accounts. I am guessing it will reduce their liabilities by roughly $680,000.


I would get legal advice. You are only 31 and if you can never work again then what they are offering is very low ball.
Please get legal advice.


Brandon, you really need to get one-on-one legal advice on this before you accept any deal. If you call our office we can do this in a free consultation. Buyouts are very dangerous for someone as young as you. It would really need to be a situation where you are definiately going back to work and very low risk your disability will return. Otherwise, why get a buyout? Just let them keep paying you.


So did you accept the offer?


No it wouldn’t be worth it plus I talked with a family friend (who is an
assistant at a law firm) and the lawyers advised me not to take it. If they
decide to try to cut my benefits to appeal the decision and they would
refer me to the best disability lawyer in my area eith a discounted rate.


Good choice.

Could have made a counter offer also to see what they say. Like $500,000 :grinning:


Wouldn’t a big sum be taxed more than a yearly amount?

Isn’t the yearly amount increased for inflation each year?


If an employee pays the full premium-no tax. If a settlement is taxed the Insurance company is now obligated to with hold a portion to submit to CRA. If it gets to that issue-then obtain legal advice.


If he doesn’t pay tax on his current ltd benefits then there shouldn’t be any tax on the buyout amount.

Cpp-d is adjusted yearly for inflation. May not be the case with ltd. At least, my insurance doesn’t mention it.


Taxation of LTD settlements has changed over the past few years. Basically, if your payments were non-taxable then the entire lump settement is non-taxable. However, if your monthly LTD payments were taxable, then the portion of the LTD Lump Sump payment attributable to past payments (as opposed to future payments) would be taxable. Also, if you incur a legal fee, a portion of the legal fee is tax deductible as long as the lawyer provides the correct paperwork and declarations to you.

David Brannen

Disability Lawyer with Resolute Legal

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Hi Brandon: My insurer did the same exact thing - however, they cut me off LTD benefits 6 months after they approved me for the “any occupation” status. I appealed the decision - but lost (no surprise there) - so I engaged a Disability Lawyer. We filed May, 2017 and 3 months later the Insurer offered a low-ball settlement of just under 1 year. I’m not accepting this and either later this month or January, 2018 we sit down (my Lawyer, the Insurer’s Lawyer and the Court Reporter) to discuss.