Question
This was not an on the job injury. The Long Term Disability policy was part of insurance at work. How is settlement figured versus monthly payments? What is tax situation on settlement? State of Georgia. 20 years (potential) remaining payments. SSD active. Have you negotiated any of these settlements or know of any actual cases? So far, this doesn't seem to be a commonly talked about subject, private disability insurance. Any answers or direction would be greatly appreciated.
Answer
It is rather straight forward. The employer provides this LTD insurance as a benefit or you buy it privately. If the employer buys it, as before tax dollars were used, the proceeds are taxable as received; if you bought it, privately without employer involvement, it is tax free.
The LTD carrier monitors your health and hopes for a recovery. There is some coordination with SSD and the LTD insurer usually pays the policy limit LESS the SSD.