When you bring a workers’ compensation claim against your employer for dangerous work conditions that lead to your injury or illness, there are several ways in which you could receive compensation.
Some people receive structured settlements with frequent payments against a larger balance, while other people get an offer for a lump-sum settlement paid all at once. Understanding the benefits and drawbacks of a lump-sum settlement can help you make a more informed decision about your claim.
Lump-sum payouts can be deceptive
On the surface, receiving a large, single payment to offset the medical expenses related to your injury may seem like an incredible opportunity. With a lump sum payout, you can tackle all of the outstanding bills from your injuries at the same time, all without worrying about taxes on the compensation you receive.
The amount offered in the lump sum payout may seem generous on the surface, which is why it’s so important to carefully review these kinds of offers. What looks like a large amount could actually fall short of covering the costs you have already incurred and will continue to incur because of your injury.
Legal advice can protect your interests
Before you respond to any kind of settlement offer, you need to carefully analyze the financial impact of your injury and estimate how much it will cost you in the future. A settlement amount should cover all of your current expenses and then some. When a settlement offer doesn’t include all of the various costs and expenses you suffered, the best option may be to turn down the initial offer and negotiate for better terms.