Let’s assume your lawyer, you and your doctors have all done their homework. You know how much money you would be entitled to if you didn’t settle, when you’d get the money and for what length of time you’d get the money. The question then becomes – what’s a fair settlement offer?
The insurance company wants to make it as low as possible while you’d like to get 100% of what you’re entitled to. But there are some trade-offs.
The main reason for settling for a lump sum instead of waiting for the checks to come to you on a regular basis is to get the lump sum money now. These are the factors you need to think about:
- Your physical limitations: You need to honestly assess your physical abilities and your ability to work. If you think you can manage more than what the medical reports suggest, then a settlement may work for you. If you think your physical limits are more severe than what the doctors say and you can’t imagine living with them, then it may make sense to wait and see.
- Your education and experience: The key consideration is how well you think you do different types of work within the same company or with a different company. Also, as of June 24, 2011, you may be entitled to vocational rehabilitation benefits. The ability to get those benefits and the costs has to be considered. Once you settle, those rights are given away.
- Family factors: If you have a spouse who works and no children to support, then there’s little pressure for you to settle now. On the other hand, if your spouse doesn’t work, you don’t have a spouse, and you have a large family – then settling becomes more of a priority. Know that the insurance company may know if you’re under pressure.
- The ability of your money to earn interest: You and your lawyer need to analyze how well you can invest any lump sum. An experienced investment counselor can help do the math.
- Focus on the value of your claim – not what you’d like to buy with the money. The decision to settle or keep getting regular payments should be based solely on your physical condition, abilities and family. It shouldn’t be based on your dream of owning a home or buying that new car.