What are the benefits of choosing a lump-sum settlement over ongoing payments?
Answer
There can be a lot of factors involved in deciding whether to accept a lump-sum settlement or continue receiving weekly benefit checks. One benefit of taking a lump sum is financial flexibility. Instead of relying on smaller week-to-week payments, a lump-sum settlement gives you access to a larger amount of money at once, which you may be able to use more effectively—whether you invest it, make a purchase, or save it. You simply have more financial control with a lump-sum payment than with ongoing weekly checks.
Another major benefit is that settling removes the risk of having your weekly checks stopped. If the insurance company sends you to one of their doctors, and that doctor reports that your disability has ended, the insurer can petition the court to stop your benefits. If a judge agrees, your weekly checks may end permanently. Even if your own doctor disagrees, there’s no guarantee the judge will rule in your favor. Any time your case is brought before the court, you face the real possibility of losing your benefits.
Settling for a lump sum removes that uncertainty. By accepting a settlement, you are guaranteed to receive a defined amount of money—even if the insurance company is actively trying to terminate your weekly checks. For example, if you are receiving $1,000 per week and the insurer is trying to stop your benefits, you might settle for $100,000, allowing you to secure approximately two more years of payments without risking a total loss. Speaking with experienced workers comp lawyer in Rhode Island can help you understand when this strategy makes the most sense. You may also want to review our RI workers’ comp benefits, as well as related topics like lump-sum vs ongoing payments or how settlements are calculated.
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