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Often, injured workers choose to settle their cases with their employer's insurance company in return for one-time cash payments (although for large sums of money some insurers favor paying out a portion of any settlement over a period of years).
These settlements often take into consideration:
Unpaid total temporary disability or partial disability benefits (TTD or TPD)
Temporary Total or Temporary Partial Disability benefits likely to be owed in the future
Future medical expenses
Permanent disability benefits owed or likely to be owed
Any penalties for late payment of benefits
And in some circumstances, attorneys fees
Whether you SHOULD settle your claim depends on what you are offered, what you would otherwise be entitled to if you did not settle, and whether the settlement reasonably meets your needs.
Why would I ever want to settle my workers' compensation claim?
While you are technically entitled to lifetime medical treatment, on-time disability checks (TTD or TPD), and then checks for any Permanent injuries (PPD), things do not always go so smoothly. Your employer's insurance company is a business. It is in their financial interests to limit both cash payments to you as well as the overall cost of your medical care. Often this leads to resistance or delays in receiving cash benefits, in changing doctors, authorizing physician referrals, and in getting medical procedures approved. Also, if your employer has not accepted your claim and has paid you no benefits they may feel they have a defense to paying you benefits. By settling a claim an insurer would waive this potential defense to your claim. In another example, if you are entitled to Social Security benefits, Social Security might be able to take credit against the value of your workers' compensation benefits. Settling your claim may allow you to get the most benefit from both.
Insurance companies often favor settlements over keeping your claim open for months or years. If they settle at a set amount, they can more accurately pass this expense onto their customers (employers) who purchase insurance from them. Major considerations regarding settling your claim for a lump sum payment include your ability to get another job, your eligibility for Social Security benefits, and your eligibility for Medicare or group insurance at another job or through your spouse.
If you have injuries that will require future medical treatment it is highly unlikely that any settlement will provide you will the ability to pay for any significant medical treatments on your own. You might be able to pay for doctor's appointments, prescriptions, or physical therapy, but it is unlikely you could pay out of pocket for any surgery as expensive as hospital stays can be. You need to take that into account and only settle your claim if you have no immediate surgeries planned and have some idea of how your future medical bills could be paid.