Long-Term Disability Settlement Calculator Boston, MA

This calculator adds two numbers. Back pay is the monthly benefit your policy should have paid (capped at the policy maximum if it has one, less any SSDI or workers' comp offset) multiplied by the months it has been unpaid. Benefits only start after your policy's waiting (elimination) period, so count unpaid months from the end of that period. Future benefits are the same monthly amount until your policy's end age (usually 65), converted to today's value with a discount rate. Insurers rarely pay the full future value in a lump sum, so the estimate also shows the range buyouts typically land in, which depends on whether you are still being paid, were cut off, or were denied from the start. If your benefit is taxable, it also shows roughly what you keep each month after tax.

Massachusetts rules this calculator applies

Deadline to act

For an ERISA employer plan, file your internal appeal within 180 days of the denial letter; you cannot sue until it is decided.

Discount rate

Future benefits are discounted at 3%, a common buyout assumption. If your benefit has a cost-of-living adjustment (COLA), the calculator uses 1% instead: your payments grow with inflation, so less is taken off for the time value of money.

Typical buyout range

Published lump-sum settlements land at about 50–75% of the present value of future benefits when the claim is being paid, 40–70% after benefits are cut off, and 30–60% when the claim was denied from the start. Back pay is added on top.

SSDI offset

Most employer plans reduce your LTD benefit by any Social Security Disability (SSDI) you receive (about $1,630 a month on average in 2026). Workers' compensation are usually deducted too.

Tax

If your employer paid the premiums, or you paid them with pre-tax dollars, LTD benefits and settlements are taxable income. If you paid with after-tax money, they are generally not. Get tax advice before you sign.

ERISA plans

Most employer plans are governed by ERISA: you must file an internal appeal within 180 days of the denial before you can sue, the insurer usually has 45 days (plus one 45-day extension) to decide, and the case is then heard by a judge on the written record. ERISA allows back benefits, reinstatement and attorney fees, but no jury and no punitive or emotional-distress damages. Individual, government and church plans fall outside ERISA, so state law applies: you can usually sue in state court, and bad-faith damages may be available.

Recovery and life expectancy

Insurers rarely pay every month to the end date: they will argue you may recover or that your condition shortens your life expectancy. These arguments are complex and differ case by case, so have an attorney assess how they apply to you.

General information about Massachusetts disability insurance law, not legal or tax advice. The estimate is not a guarantee: your policy wording, medical evidence, offsets and the insurer's position all change the answer. A disability lawyer can tell you how these rules apply to you.