What’s a Lump Sum Settlement?

A lump sum settlement means that you receive the entirety of your financial award all at once. There’s one payment, and that’s it. It’s up to you, as the recipient, to allocate those funds to cover your medical bills, make up for lost wages, repair damaged property, and help you cope with the pain and suffering you’ve experienced.

How Are Personal Injury Settlements Paid Out in Texas?

Q: What’s a Structured Settlement?

In a structured settlement, you receive a little bit of your personal injury award at regular intervals. You don’t get access to the whole thing at once. Instead, it’s paid out on a predetermined schedule over a specific amount of time. In Texas, all structured settlements must comply with rules and regulations established in the Structured Settlement Protection Act. Often, the full value of a personal injury settlement is placed into something like an annuity that earns interest so that you have a steady stream of income you can count on for years to come after you get hurt. It’s possible to request a future lump sum payment when you’ve set up a structured personal injury settlement.

Q: What’s Better, a Lump Sum or a Structured Settlement?

It really depends. Lump sum payments are much more common, especially when the plaintiff has suffered minor to moderate injuries that aren’t likely to cause long-term disability or missed time at work. Receiving all the funds awarded in a personal injury settlement at once can help cover current medical expenses and offset a brief disruption in income. On the other hand, structured settlements are often helpful in situations where a plaintiff sustains catastrophic, life-changing injuries that will likely require long-term medical treatment and significantly affect their ability to work. The structured settlement ensures that the plaintiff has access to money to pay for medical care in the future and won’t have to worry about saving lump-sum funds to offset a diminished earning capacity down the line. Structured settlements can also be appropriate when an accident victim is a minor. In these situations, the minor’s settlement can be paid out slowly over time to help them navigate challenges their childhood injury might have created.

Personal injury settlements can be paid out all at once in a lump sum or structured into a series of payments over time. How you receive your personal injury settlement will depend a lot on your age, the damages you’ve been awarded, and how much your case is worth.

An experienced Round Rock injury lawyer will help you negotiate the terms that are best suited for you and your family.

Lump Sum vs. Structured Settlement

There are two ways to receive compensation awarded to you in an insurance claim or lawsuit: a lump sum or a structured settlement.

What Is a Lump Sum Settlement?

A lump sum settlement means you will receive the entirety of your financial award at one time. There’s one payment, and that’s it. As the recipient, you determine where you’ll allocate the funds, whether it’s to cover your medical bills, make up for lost wages, repair damaged property, or help you cope with the pain and suffering you’ve experienced.

What Is a Structured Settlement?

In a structured settlement, you’ll receive a part of your personal injury award at regular intervals. It’s paid out on a predetermined schedule over a specific amount of time. In Texas, all structured settlements must comply with rules and regulations established in the Structured Settlement Protection Act.

Often, the full value of a personal injury settlement is placed into an annuity that earns interest so you can have a steady stream of income to count on for years after you’ve been hurt. However, it’s possible to request a future lump sum payment when you’ve set up a structured personal injury settlement.

Is a Lump Sum or a Structured Settlement Payment Better?

It depends. Lump sum payments are much more common, especially when the plaintiff has suffered minor to moderate injuries that aren’t likely to cause long-term disability or missed time at work. Receiving all the funds awarded in a personal injury settlement at once can help cover current medical expenses and offset a brief disruption in income.

On the other hand, structured settlements are often helpful in situations where a plaintiff sustains catastrophic, life-changing injuries that will likely require long-term medical treatment and significantly affect their ability to work.

The structured settlement ensures the plaintiff has access to money for future medical care and doesn’t have to worry about saving lump-sum funds to offset a diminished earning capacity down the line.

Structured settlements can also be appropriate when an accident victim is a minor. In these situations, the minor’s settlement can be paid out slowly over time to help them navigate challenges their childhood injury might have created.

A Personal Injury Lawyer Can Help You Negotiate an Appropriate Settlement and Distribution Schedule

Whether you receive a lump sum or a structured personal injury settlement occurs during negotiations. The insurance company will always work to limit your recovery, so it’s helpful to have an experienced Round Rock personal injury attorney offering guidance throughout settlement negotiations.

At Dow Law Firm, our personal injury lawyers won’t just negotiate the highest possible settlement but will also help you receive your monetary award in the way that’s most beneficial for you and your family. Contact our Round Rock injury attorneys at (512) 240-9951 today to learn more.