How Are Personal Injury Settlements Paid Out in Illinois?

Victims of accidents caused by others may seek financial compensation for their losses from the at-fault party. Most of the time, once a decision is made about what the at-fault party owes, a personal injury settlement happens. There are typically three different ways in which insurance companies pay personal injury settlements in Illinois.

Understanding your settlement options and how they affect your financial recovery is crucial. If you’ve been injured due to someone else’s negligence, contact a Chicago personal injury lawyer today to discuss which payment method is right for your situation.

Choosing the Right Type of Personal Injury Settlement

In some situations, the court will decide how the at-fault party pays the settlement. Other times, the victim has some say in what they prefer. In all situations, you should know exactly what to expect, and your personal injury attorney should inform you of the consequences of each decision.

Lump Sum Payments

A lump sum payment is typically a single, large payment for the entire value owed to you. Individuals with significant immediate expenses and doctor’s bills may need to use this method.

This lump sum payment gives you the most money upfront, but it is not always the ideal choice. That is because it is likely significantly less than what you might receive in other forms. Your personal injury attorney may speak to you about the limitations of lump sum payments in some situations. For some, these payments are ideal, especially if you need to make a significant investment upfront.

Structured Settlement Payments

Structured settlements are another strategy that allows victims to receive payments for their losses over a period of time. This makes it easier for the insurance company to pay you and also creates a steady flow of funds to you over time. Payments may be monthly, quarterly, biannually, or annually, depending on the agreements involved.

Structured settlements benefit victims who may need help for long-term financial health rather than meeting current needs. The funds can also provide you with tax advantages, depending on your financial situation. For many, this means more income over time. You can count on the funds, much like a paycheck, arriving at steady intervals.

Hybrid Settlement Payments

The third option combines the first two. Providing you with a significant upfront settlement and then payments over time. The initial lump sum payment is less than the full value. The rest is then paid to you over time.

The payments you receive on an ongoing basis will be smaller than the original payment. Often, people use this method to pay off initial debt, such as medical bills, and then count on the rest to supplement their needs on an ongoing basis.

Which Method Is Best For You Is Not Always Clear

When an insurance company owes you a significant amount of money, it can be essential that you work with a personal injury lawyer in Chicago who will uncover what your losses are, who owes them, and how payment best aligns with your personal needs. Your personal injury attorney knows the state’s laws, specifically those surrounding personal injury claims (735 ILCS 5/2-2301), and how they apply to your situation.

Factors such as the value of your claim, the types of financial losses you have incurred, medical costs, and your income needs all play a role in determining which type of payment is most beneficial to your situation.

Your personal injury lawyer represents you. Their job is to inform you of the legal rights you have as well as the stipulations of any agreement. Contact Taxman, Pollock, Murray & Bekkerman at (312) 586-1700 to discuss your case with a Chicago personal injury attorney before making a decision.