Sometimes, the workers’ compensation insurer and the employee voluntarily agree to a lump sum settlement that requires the insurer to pay a predetermined sum of money to cover all or part of its obligation to the employee. In most cases, the employer must also agree to the settlement. A lump sum settlement is typically a final resolution to a claim for cases in which the insurer has never made any payments or acknowledged responsibility for the claim. But, if the insurer has compensated the employee and accepted responsibility for the claim, the employee’s continued right to medical expenses and rehabilitation cannot be settled. Instead, even after the case has been settled, these expenses remain infinitely open, and the insurer continues to be held responsible for those costs.
Deciding whether or not to agree to a lump sum settlement can be a difficult decision. It can be beneficial to both parties in that the employee can use a lump sum payment in numerous ways to better themselves and their families while the insurance company is most often able to close the not face any uncertainty regarding future expenses. However, this must be a voluntary agreement by both parties. Some factors to consider as the employee include your age, wages, training, work history, education, medical condition and ability to return to work.
Again, a workers’ compensation lawyer can provide beneficial support in assessing a lump sum offer and evaluating all of the factors necessary to make a good decision. Often, insurers may offer lump-sum settlements as a way to pacify the employee, but these offers are often in the best interest of the insurer instead of the employee. An experienced attorney provides proper legal counsel and review to ensure a fair settlement for the employee.