Lump-Sum Settlement Eligibility

If you have suffered an on-the-job injury or illness that requires extensive medical treatment or has resulted in a disability that prevents you from returning to work, you may be eligible to receive a lump sum settlement. This means you can turn your future benefit payments into cash.  While this may sound enticing, there are certain risks involved, namely that you would be forfeiting your right to seek additional medical and wage benefits in the future, even if your condition worsens and you need further treatment. 

Before you sign on the dotted line, it’s critical to consult with an experienced workers’ compensation lawyer who has experience negotiating and structuring lump-sum settlements. The Law Office of Marshall S. Adler can evaluate your case to determine whether a one-time lump sum payment is in your best interests. 

Call today 407-648-5523 to schedule a free consultation with our founder and lead workers’ comp attorney Marshall Adler. 

Questions to Ask Yourself Before Accepting a Lump Sum Settlement

As you consider settling your case, you should take several things into consideration, including your current medical condition and prognosis, work status, and financial situation. 

  • Is your medical condition stable? What is the likelihood that your injury or illness could get worse?
  • Have you been properly compensated for the time missed from work?
  • Does the settlement cover all of your injury-related expenses, including future care?
  • Does the settlement factor in the loss of potential earnings if you can’t return to work in the same field or not at all? 

Workers’ Compensation Settlements: Lump Sum vs. Structured Payments

There is no law in Florida that requires an insurance company and an injured worker to reach a settlement in a workers’ compensation case. A judge can’t force an insurer to pay you, nor can they force you to accept an offer. Any settlement you enter into is purely voluntary.  Workers’ comp lawyer Marshall Adler can represent you during negotiations with the insurance company and advocate for your legal right to a fair and full settlement. 

A workers’ comp settlement can be paid in one of two ways — a lump sum or structured annuity settlement.

Lump-sum settlement: Also known as a “wash-out,” a lump-sum settlement is essentially a contract between you and the insurance company wherein you agree to close your claim and give up the right to seek additional benefits in exchange for a one-time, lump-sum payment. The payout would be equal to the total amount the insurer would have paid you over the life of the claim. 

Structured settlement: Also known as a structured annuity, a structured settlement is a series of continuous and consistent payments over an agreed time frame or through the remainder of your life. 

Pro’s of Accepting a Lump Sum Settlement

  • A lump sum settlement is a guaranteed benefit that puts money in your pocket now. You will no longer have to deal with the uncertainty of whether your benefits will be paid on time or not at all.
  • Provides immediate financial relief. You can use the money however you wish — spend it, invest it, or pay off medical bills and other debts. 
  • Eliminates the threat of litigation – you don’t have to worry that a judge will rule in your employer’s favor leaving you with little or no benefits

Con’s of Accepting a Lump Sum Settlement

  • Your weekly benefits payments (TTD checks) will stop
  • You give up your right to future medical treatment for your injury or illness
  • Your employer would be off the hook for unforeseen complications that arise from your condition
  • A lump-sum payout will likely be less than the maximum amount you would have been paid over the long term  

Pro’s of Accepting a Structured Settlement 

    • Certainty of having a steady stream of income; helps you budget 
    • Tax-free; allows you to earn interest
    • May be used to fund a Workers’ Compensation Medicare Set-Aside (MSA) account,
  • May include an up-front payment for outstanding medical bills and other expenses

Con’s of Accepting a Structured Settlement 

  •  You are mostly locked in once you agree to a structured settlement and can’t change your mind in the future and get a lump sum payout without incurring significant penalties
  • Settlement money cannot be accessed ahead of schedule 
  • There may be unpredictable changes in the economy such as recession and inflation that can result in annuity payments that don’t meet your needs. 

Want to Settle Your Workers’ Compensation Case? 

The Law Office of Marshall S. Adler offers a free initial consultation to discuss settlement options in your workers’ compensation case. Call us today at 407-648-5523.