If you are offered a choice between a check in your hand or a promise of payments over time, taking the check may seem like the obvious choice.
In a worker’s compensation case, though, there are many things you should consider before making this decision. Is it in your best interests to take a lump sum settlement? Will you be left high and dry with no compensation when your injury worsens or you need additional treatment?
Getting a lump sum of money to settle your case may sound ideal, but whether you should accept this lump sum settlement is a big decision to make. That’s not to say that lump sum settlements are always bad or the wrong choice. But it’s important to be aware that taking one may not be the right decision in your particular case.
Let’s take a step back and address some important questions. What is a lump-sum settlement, and how do you know when taking one is the right choice for you?
What Is a Lump-Sum Settlement?
If you receive a lump-sum settlement, you’re paid one amount, one time. That’s it. You get your money in one chunk, and your workers’ comp case is considered settled.
Most insurance companies prefer lump-sum payments because, by paying the amount of the claim once and altogether, they eliminate the unknown. In many cases, the insurance company will pay less in a lump sum settlement, and they won’t have to worry about continuing to send weekly payments for an unknown amount of time in the event your case stretches out or your condition gets worse. They just pay up once, and they’re done.
Advantages of Lump Sum Settlements
Benefits of agreeing to a lump-sum settlement include the following:
- You get the money you need right away.
- If you have bills piling up due to your injury, you can pay them all at once.
- If you plan to use the money to start over (for example, starting a business or buying a house), you can do so right away (but you cannot go back for more money if you need additional treatment).
- If the amount of the settlement isn’t very large, it makes sense to get it all at once.
- You get closure because your workers’ comp case is over.
Now that you know what a lump-sum settlement is and how it could work in your favor, you may be wondering if agreeing to a lump sum is the right move for you.
Does Settling for a Lump Sum Make Sense for Your Case?
Ask yourself the following questions:
- Does the settlement seem fair?
- Will I be able to get back to work soon?
- Will my injuries get better soon?
If you answered no to any of the above questions, accepting a lump sum might not be your best choice, especially if your condition could worsen. Your case may be worth more than what you’re being offered as a one-time payment. And, once you settle the case, you cannot receive more money for additional medical treatment.
If you answered yes to the above questions, a lump-sum settlement might benefit you because it’s unlikely that your condition will change for the worse. Once you go back to work, your benefits will stop so, if you want to accept the lump sum settlement, you should not delay.
Do You Understand What Settling Will Mean for You?
Before you make a final decision, understand that once you decide to settle for a lump sum, the weekly checks you’ve been receiving will stop. Your weekly payments will be replaced by a single and final lump-sum payment.
You should consult with your attorney about whether it makes sense for you to settle your case and what a lump sum settlement will mean in your unique situation.
What is the Value of Your Claim?
Your settlement amount will likely be less than the value of your claim. So, before you settle, ask yourself whether you’re willing to take a lesser amount than the amount of your claim.
Need help deciding if a lump sum is right for you?
Understanding whether taking a lump sum settlement works for or against you can be confusing, especially if you don’t have an attorney. That’s why speaking to an experienced attorney about your case before making decisions about settlement is a good idea.
To discuss your case, call a Myrtle Beach personal injury lawyers at Coastal Law today at (843) 488-5000, or complete our online form.