There are two basic types of settlements: lump sum settlements and structured settlements. Your particular situation will determine which type of settlement makes the most sense for your and your family. An attorney can help you further demystify these types of settlements, and can also advise you on which one better suits your needs.

Lump Sum Settlements

Just like they sound, lump sum settlements are those that are received in one cash payment. Money received in a lump sum settlement is managed by the family, and can be applied to past, current, and future medical costs. The family has the flexibility to use the money as they see fit, and is responsible for investing it.

Structured Settlements

Structured settlements are paid throughout the life of the child in installments. Here’s how they work: an insurance company who specializes in defendant liability buys an insurance annuity, then pays the child a certain amount of specified benefits.  The money is invested and managed by a bank or other qualified entity.

Structured settlements offer a peace of mind that lump sum settlements don’t, because you know a certain amount is coming and will always be available for medical costs. However, once the terms of a structured settlement are set, they can’t be changed.

When exploring lump sum settlements, it’s important that future medical costs, cost of living increases, and inflation are taken into consideration. An attorney can be your best advocate in determining whether a particular lump settlement makes sense for you.

If you think your child’s injury was the result of someone else’s negligence, you may have compensation coming to you that can ensure that your child forever receives the therapies and benefits that he needs. Contact us to find out how we can help.