Workers Comp: Lump Sums and Buyouts


Depending on the severity of your workplace injury, your workers compensation benefits may be relatively small, or could be extremely large. If your injury is minor and only requires a few trips to the doctor, then it’s likely your coverage will mostly compensate for your medical bills. If the injury is severe enough that it prevents you from immediately returning to work, then you may be able to get compensation for lost wages. The largest types of payments for workers’ compensation occur when your injury is very serious and results in a permanent disability or permanent impairment.

What are Permanent Disabilities and Impairments?

When getting compensation for injuries, you and the insurer usually cannot determine the full compensation until you have reached maximum improvement. Maximum improvement is the stage of your treatment where your health and physical ability have improved as much as possible. With all luck, your maximum improvement will bring you to a state of health that is similar to your health before the injury.

Unfortunately, some people who suffer serious injuries reach maximum improvement, but still suffer from serious physical conditions. These conditions are permanent and affect your ability to work and live normally, and these qualify as permanent disabilities and impairments.

The difference between disabilities and impairments is a question of severity, and disabilities are the more severe of the two types of injuries. For example, if you can no longer move your arm, that would be a disability. If you can move your arm, but it has reduced flexibility and range of motion, such as inability to raise it above your shoulders, that would qualify as an impairment. Either way, if you have a permanent condition because of your workplace injury, you are entitled to additional compensation.

Lump Sum Payments or Periodic Installments

Calculating the amount of benefits for a permanent disability or impairment is very difficult and complicated. You should hire a lawyer who can help make sure you are being compensated appropriately. Typically the payment amount will be calculated based on the disability, impairment rating, average monthly wage, age, and whether or not you received previous disability payments.
Once you agree on the way to calculate the payment amount, you may have the choice to choose a lump sum or installments that are paid out over time. This decision is completely up to you, but you should know that lump sums are typically a smaller total amount than periodic installments.

Get the Help of a Workers’ Comp or Personal Injury Attorney

It is very important that you understand how the payment is being calculated and that you are sure it is being calculated correctly. Impairments are rated based on their severity, but these ratings can be different depending on the physician who does the evaluation. If you believe your impairment is not being rated correctly, this could significantly affect your compensation. Our attorneys can help you review the payments and make sure you are getting what you deserve. Please give us a call if you need a consultation or have any questions about workers’ comp.

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