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What Are Lump-Sum Settlements?

lump sum settlement form

Most workers do not consider that they may suffer a serious injury on the job. But, what if you do suffer a severe work injury? Clearly, workers’ compensation is a satisfactory resolution; however, filing workers’ compensation still leaves workers with an important decision to make. Injured workers need to thoroughly reflect on whether or not they should receive a large sum or receive periodic payments for their injuries.

 Lump-Sum Payments Versus Periodic Payments

Although the idea of receiving a large payment may seem beneficial, it may not be the best solution. The first thing to consider is whether you have achieved maximum medical improvement. In order to settle a claim, the employee must be in the best medical condition possible. This is usually the case with catastrophic injuries; these injuries include amputation, paralysis, vision loss, facial scarring or hearing loss. If the employee is hurt and then later recovers, they will no longer be eligible for workers’ compensation. In this case, there is no need to pursue any settlements.

Settlements usually occur with more serious injuries. For this reason, they will not be approved within the first four months after the injury occurs. Naturally, employees must be given time to heal and evaluate their medical condition before a settlement can be introduced.

As part of a settlement, there will be an exchange between the former employee and the workers’ compensation insurance company. Usually, the entire amount is discounted by about five percent, so the former employee will receive less money than if they received periodic payments. Additionally, the former employee may have to waive other rights. In Pennsylvania, workers will not give up their rights for medical treatment after a lump-sum payment.

In some instances, a settlement of a lump-sum may be appropriate. But, it is important to consider all options. Becoming educated about your options will help you make an informed decision. An attorney can assist you in this process. Once the settlement is worked out among the parties, a judge must review it for the party to receive any equities. The judge may read certain parts of the settlement, and ask the former employee if they fully understand the agreement.

Chester County Workers’ Compensation Lawyers at Wusinich, Sweeney & Ryan, LLC Represent Injured Workers

If you or someone you know has been injured at work, you may be eligible for compensation. Workplace injuries can be extreme and cause victims to have lifelong care. It is important to speak to an experienced attorney about your situation. Our Chester County worker’s compensation lawyers at Wusinich, Sweeney & Ryan, LLC  will assess your case and help you obtain maximum compensation for your injuries. Contact us online or call us at 610-594-1600 for a free consultation. Located in Exton, Pennsylvania, we also serve clients in Downingtown, West Chester, Coatesville, Phoenixville, Malvern, Lyndell, Wagontown, Uwchlan Township, Parkesburg, Chester Springs, Lancaster County, Reading, and Morgantown.