Understanding Workers’ Comp Lump Sum Settlements in NC and SC

If you have reached maximum medical improvement (MMI) and are ready to settle your workers’ compensation claim, it’s time to consider how you want to receive that potential settlement. In general, there are two main ways to receive a workers’ compensation settlement in North and South Carolina – all at once in a lump sum payment or structured in installments over an extended period of time. TipMaximum Medical Improvement (MMI) is when your doctors have determined that they have exhausted all avenues of treatment and that your condition cannot be improved any further.

As a workers’ comp attorney, I urge you to consider the following issues before agreeing to anything:

Immediate financial needs
Do you have any large, urgent financial obligations that need to be met immediately?
Money management
Can you plan your finances to meet your long-term needs?
Life stage and health
Do you want to be able to spend the funds now or do you want to ensure consistent financial support for the future?

Consult with an experienced workers’ compensation attorney before you sign any settlement paperwork to determine what type of potential settlement may make sense for you. For a free case evaluation, call 1-866-900-7078 today!

Table of Contents

How Workers’ Comp Settlements Are Paid – Lump Sum or Structured

If you accept a settlement offer, you and your attorney can determine how you want it paid to you. Workers’ comp settlement payments may come in two forms:

Lump sum: You receive the total potential settlement amount in a single payment. Unless you have catastrophic injuries that will require significant future medical treatment, this is the most common way that settlements are paid out
Structured: Your potential settlement is paid to you in installments over an extended period. If your work injury or illness left you totally disabled and in need of long-term care, your lawyer may advise you to consider a structured settlement. Additionally, if you are able to return to work and settle for the value of your permanent impairment rating, this may or may not be paid out weekly versus in a lump sum.

How Lump Sum Payments Are Calculated in Workers’ Compensation

There is no set formula for calculating a lump sum workers’ comp settlement payment. When I negotiate a lump sum settlement, I focus on several key factors, such as:

current and projected lost wages
current and future medical expenses
vocational training expenses
educational and vocational history
severity of the injury
any impairment rating (PPI)
ability to work and any work restrictions
future job prospects

Unfortunately, pain and suffering are not factors you can receive compensation for in a workers’ comp settlement in either North or South Carolina.

Your adjuster may reach out to you with an offer to settle your case for a lump sum, but they may not properly evaluate these factors. Before accepting any settlement, I recommend that you consult with an attorney.

I recently worked with an injured worker who had been told by the insurance company that they were only entitled to payment for their impairment rating. However, that was not the case. The individual was out of work and had restrictions that prevented them from returning to pre-injury employment. We were able to get involved and ultimately negotiate a lump sum settlement that was substantially higher, as it also accounted for our client’s work history, permanent restrictions, and future job prospects.¹

The Pros and Cons of Workers’ Comp Lump Sum Settlements

When I discuss whether or not a lump sum settlement is in my client’s best interests, we carefully consider the pros and cons that lump sums offer.

The pros of negotiating a lump sum workers’ comp settlement can include:

Immediate financial stability
Do you have pressing financial obligations, such as needing to pay off debts?
Potential investment growth
If you receive a lump sum, you may be able to invest that money and potentially grow the amount (but there is risk involved)
Complete control over the money
There are usually no restrictions to how you spend the money
Choice of doctor and care
You can choose your own doctor and treatment plan in the future (but you must pay for it yourself)
Prompt access to funds
If you have concerns about your health or life expectancy, you can have access to the full amount while you can use it

The cons of negotiating a lump sum workers’ comp settlement can include:

Permanent closure
If you agree to resolve your claim by a compromise settlement agreement, also called a clincher agreement, you give up the right to re-open your workers’ comp case and seek reimbursement of future medical expenses or lost wage benefits in exchange for a sum of money
Uncertainty of future medical needs
If you accept a lump sum settlement before reaching Maximum Medical Improvement, your condition could have unforeseen complications, and the treatment will be your responsibility TipMaximum Medical Improvement (MMI) is when your doctors have determined that they have exhausted all avenues of treatment and that your condition cannot be improved any further.
Proper financial management is required
Without proper management, there is a risk of quickly depleting the money and jeopardizing long-term financial stability
Tax and other benefit implications
Any capital gains, interest, or dividends from investing a lump sum will generally be taxable and accepting a lump sum settlement can impact other benefits you may be receiving

The Workers’ Comp Team at James Scott Farrin Is Ready to Help You

If you are being offered a settlement in your North Carolina or South Carolina workers’ compensation case and are wondering whether a lump sum settlement is right for you, contact one of our workers’ compensation lawyers right away. Our team has the knowledge and experience to help you negotiate for a maximum settlement and, just as important, we have a You-First Policy.

We have people on our team who have worked for insurance companies and insurance defense firms, and we use this inside knowledge when we strategize with our clients on how to potentially settle their cases and fight for maximum compensation. And there’s no need to worry about cost – With us, there are no hourly fees, and if we don’t recover compensation for you, you owe us no attorney’s fee whatsoever. Guaranteed.²

Our workers’ comp attorneys are recognized professionals in their field, many of whom have spoken at workers’ compensation seminars for other attorneys. Several of our attorneys have been recognized by their peers with prestigious workers’ comp awards. And our firm was named to the 2024 Best Lawyers ‘Best Law Firms’ list, earning a Tier 1 ranking (the highest) for Workers’ Compensation law.⁴

We have 14 office locations in North Carolina, one in South Carolina, and our team takes workers’ comp cases all across both states. We can even come to you!

Call us today at 1-866-900-7078 for your free case evaluation – before you sign anything.