Lump Sum Offers in Workers’ Comp Cases

by | Mar 14, 2016 | Lawyers


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If an insurance company offers a lump sum payment for a workers’ comp claim’, the client should think carefully about whether accepting the offer is the right decision. Below are the steps injured workers should take before deciding whether to accept a lump sum offer.

Consider the Reasoning Behind the Offer
Most insurers prefer to settle claims with lump sums because it turns an unknown (the length of time and the amount they’ll pay) into a known. Lump sums mean that insurers pay a lower settlement amount overall, and they bring closure for the insurer and the client. For a settlement to be sensible, the client should honestly assess their situation and their condition. If the case is in dispute, a settlement may be a good choice because it gives the client some degree of control over their results.

Determine the Claim’s Value
To determine a reasonable amount for a settlement, the workers’ comp claim’s value needs a fair assessment. Here, value refers to the amount the insurance company will pay over the claim’s life. The value can be determined by multiplying the weeks left on the claim by the weekly benefit.

Consider the Chances of Continued Benefits
A person can only receive workers’ comp benefits if they are unable to return to work, and insurers can be zealous in their efforts to ensure that a claimant is disabled. Some insurers hire private investigators to watch claimants, and others require the client to see a corporate physician. If the company believes that the claimant can return to work, they may discontinue benefits. Clients should realistically assess their condition and, if they feel that they’re close to being ready to return to work, a settlement may be in their best interest.

What Happens After Settlement?
Once the settlement is agreed upon, the case goes to the DIA for approval. The client’s attorney with Website Domain tells the court why a lump sum settlement is the best choice, and the insurer’s lawyer gets a chance to tell their side of the story. The judge reviews the paperwork and asks the client questions to ensure that the settlement is fair. Following that, weekly benefits stop and the insurer has 14 days to give the client a settlement check.

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