Lump Sum Settlement

Lump sum settlements may be offered by an insurance company to compensate workers for permanent injuries following a work-related accident. If a lump sum payment is accepted by the injured worker the insurance company may avoid paying on-going, monthly, cash settlements to the worker. In some states the insurance company may also include payment for medical bills and no longer be responsible for the workers' medical expenses.

State laws vary, however, and some states do not allow the worker to forgo their right to medical care, but instead, the worker retains their right to future medical care. If the lump sum settlement is accepted, the worker is not allowed to re-open the workers' compensation case for additional monthly cash payments.

Prior to agreeing to a lump sum settlement, workers may want to seek legal help from a workers' compensation lawyer. The lump sum settlement should not be accepted until the injured worker is assured it includes adequate compensation for any disputed amounts, past-due temporary disability payments, and unreimbursed medical expenses.

Options to a workers' compensation lump sum settlement

If the insurance company offers a lump sum settlement to an injured worker but the worker refuses to settle, the injured worker has two options: taking their case to court and arguing that they should receive a higher weekly payout or lump sum settlement or accepting what the insurance company offers in weekly compensation.

Benefits of lump sum payout

There are benefits for accepting a lump sum payout. Not only do you avoid a lengthy trial, you avoid the risk that a judge may award you less than the amount offered. Additionally, if you do decide to proceed to trial in some state you are not able to receive a lump sum payout after you win at court, only weekly payouts. Another benefit, assuming you do not need medical care in the future, is you may receive money for future medical benefits that you will not have to use.

But the reverse could also be true. If you accept a lump sum payout but you do not receive enough for future medical care, and you have waived your rights to additional medical treatment, you may have to pay for all future medical costs out of pocket, even if they were related to your work accident.

Talk to a workers' compensation lawyer, especially if you have permanent disabilities following your work-related accident. The insurance company may use your rating to come up with a starting settlement amount, but a lawyer can help you negotiate a higher amount for permanent disability compensation, the cost of future medical treatment, and past due temporary disability workers' compensation benefits.