A Lump Sum Settlement is simply the payment now, by an insurance company to cover future payments that the insurance company is required to make under the workers compensation law. Under that law you’re entitled to three years of temporary total compensation, which is sixty percent of what your average weekly wage was with your employer.
Under certain circumstances you’re also entitled to five years of temporary partial composition. Often, if someone is entitled to temporary partial compensation, the insurance company and the attorney will get together and come up with a mathematical formula that pays the employee a good chunk of that money up front and then releases the insurance company from paying any further weekly payments. The attorney receives twenty percent of that amount as a fee but it is well within the employee’s interest to enter into a lump sum settlement because otherwise the insurance company may move at anytime to cancel the compensation.
To discuss a workers’ compensation matter, please contact Judd L. Peskin via email or by telephone at 413-734-1002.