302 504 4815

Call Us For Free Consultation


Risks and Benefits of Disability Lump-Sum Buyouts

Law De > Blog  > Risks and Benefits of Disability Lump-Sum Buyouts

Risks and Benefits of Disability Lump-Sum Buyouts

At some point, you might be offered a lump sum buyout for your disability. Whether this is through your job’s retirement plan or your disability benefits insurance company, the decision you make is vital. This decision comes down to choosing between the lump sum and a disability benefits program. There are risks and benefits for both choices. Consider asking a Delaware disability lawyer for help if you are not sure which one to choose.


A lump-sum buyout is a large sum of money that is offered to someone, all at once. The catch is you may have to choose between a disability lump sum of money and whether to continue disability benefits. In some cases, you could potentially lose your disability benefits if you accept the lump sum.

However, this depends on your financial situation and the lump sum amount. In some cases, people may continue receiving supplemental security income (SSI) but at a reduced amount. This is because SSI is based on your financial income and resources. As long as your monthly income remains below a certain amount, you might keep your benefits.

In terms of financial resources, these are things you own that can be either exchange for cash or for food and shelter. What this includes is money you have saved up, but can also include property, vehicles, insurance, and land. You are limited to $2,000 of resources before your SSI benefits could decrease or be removed. Married couples can have resources that go up to $3,000 total.Risks and Benefits of Disability Lump Sum Buyouts

However, you can avoid losing SSI if you spend enough of your resources in that given month to decrease your resources below those amounts. As long as you do this before the end of the month, you should be able to retain your benefits.


You might be wondering whether accepting the lump sum buyout or keeping your disability benefits is better. This can be a difficult decision depending on where you stand financially. The risks of lump sums are:

  • Being open to scams depending on the lump sum source
  • You could receive less money overall compared to disability benefits
  • You may not be able to undo the lump-sum buyout

Compared to lump-sum buyouts, monthly disability benefits will provide you with less money right away but could potentially provide more money overall. However, this depends on how long you will receive disability benefits and how old you are. You might find by doing the math that the lump sum will actually pay more than your total disability benefits payout. Consider contacting a Delaware disability lawyer if you have questions.


Choosing between a lump sum buyout and disability benefits is a huge financial decision to make. You may not have to make this financial decision alone. Consider reaching out to a Delaware disability attorney to figure out and weigh your options. Start by contacting Edelstein Martin & Nelson today at (302) 295-5050 for a free consultation. Our team of Delaware disability lawyers is located in Wilmington, DE, and might be able to help you obtain the disability benefits you need.

No Comments

Sorry, the comment form is closed at this time.

Call Email