When you have been hurt at work, you may be entitled to certain workers' compensation insurance benefits. That usually includes disability payments and free medical care. However, if you are unable to return to your job because of your medical condition, you may also be entitled to a settlement.
What is a Lump Sum Settlement?
A lump sum settlement is an agreement between an injured worker and their employer's workers' compensation insurance company. In a lump sum settlement, the injured worker receives a one-time payment in exchange for giving up their right to receive ongoing workers' compensation benefits.
Maximum Medical Improvement
Lump sum settlements are often offered to injured workers who have reached maximum medical improvement (MMI), meaning they have recovered as much as they are likely to from their injury, but may still have some level of impairment.
How Much is Paid via a Settlement?
The amount of a lump sum settlement will depend on several factors, including the severity of the injury, the expected cost of future medical treatment, and the potential value of ongoing wage loss benefits. In some cases, the insurance company may offer a lump sum settlement that is less than the total value of the worker's expected benefits, to save money on ongoing payments.
What Hurt Workers Need to Know
While a lump sum settlement can provide an injured worker with a large sum of money upfront, there are some potential drawbacks to consider. For example, if an injured worker accepts a lump sum settlement, they may be giving up their right to receive ongoing medical treatment and wage loss benefits. This can be a significant risk if the worker's medical condition worsens over time or if they are unable to return to work as expected.
Additionally, lump sum settlements can be complex legal agreements that may require the assistance of an experienced workers' compensation attorney. It is important for injured workers to fully understand the terms of any proposed settlement before accepting it, and to consult with an attorney who can help them negotiate a fair and favorable settlement.
A lump sum settlement can provide a one-time payment to an injured worker in exchange for giving up their right to receive ongoing workers' compensation benefits. While this option can be attractive to some injured workers, it is important to fully understand the risks and potential drawbacks before agreeing to a settlement. Speak to a workers' compensation attorney for help in negotiating a settlement.