The Concept of Present Value In The Context Of Pennsylvania Workers’ Compensation
A Pennsylvania Workers’ Compensation Lawyer must understand the concept of “Present Value”. Simply stated, a dollar today is worth more than a dollar tomorrow. Why does this matter in a Pennsylvania Workers’ Compensation case? When it comes to settlement, I often explain to clients that receiving a lump sum of money rather than a period of ongoing wage loss checks is beneficial because you can earn interest on the money, invest it, and/or use it for education. Rather than letting the money sit in a mutual fund of the insurance company gaining interest, you make the money work for you.
Of course, the amount of the settlement has to be fair and take into account the numerous factors that are essential in valuing a Pennsylvania Workers’ Compensation claim- such as the average weekly wage of the injured worker at the time of injury, the nature and extent of the disability, whether any petitions are pending that threaten to reduce or eliminate benefits, the age of the injured worker, the residual alleged earning power, etc. But in a scenario where the Employer/Insurer offers 4 years of checks to be paid out over 4 years, versus 4 years of up front money (or even 3 years up front and 1 year spread out), it is a classic “no brainer” to accept the lump sum amount. The equation gets trickier when the offers entail 4 years of up front money versus 6.5 years spread out. In these scenarios, the injured worker sometimes likes the security of a regular check over a longer period of time. It goes without saying that every case is unique and injured workers have to consult with their Pennsylvania Workers’ Compensation Lawyer and their family to determine what best fits their lifestyle and goals.
In many cases, the Employer/Insurers offer a lump sum amount. However, in cases involving State Workers, the settlement discussions tend to involve payments over a period of time with a smaller lump sum, up front payment.
For your convenience, here is a link to Wikipedia’s Present Value Page
If you have questions about a Pennsylvania Workers Comp Settlement and how it works then call experienced PA Work Injury Lawyer Michael Cardamone at (267) 651-7945 or email him at michael@cardamonelaw.com for a free and prompt consult 7 days a week.
