If you've been injured due to someone else's negligence and are considering a personal injury claim in Connecticut, you're probably focused on getting the compensation you need to recover. But once your case is resolved, you'll also need to make an important decision: how should you receive your settlement?

Two common options are a lump sum payment or a structured settlement. Both have pros and cons, and the right choice depends on your unique financial situation, the severity of your injuries, and your long-term needs.

This article breaks down how each option works, what Connecticut law says about settlement agreements, and how you can make the best choice for your future.

Lump Sum Settlements For CT Personal Injury Claims

A lump sum is a single payment made to the injury victim once the case settles. This amount covers the full agreed-upon compensation and is typically paid within a few weeks after the settlement agreement is finalized.

Advantages of a Lump Sum

• Immediate access to all funds: This is helpful if you have large medical bills or need to make major life adjustments.
• Greater flexibility: You can invest, spend, or save the money as you see fit.
• Simplified legal process: Once you accept the payment, the case is fully resolved.

Potential Drawbacks

• Risk of mismanagement: Without careful planning, the money can run out faster than expected.
• No adjustments for future needs: If your medical condition worsens, you can't ask for more compensation later.

Structured Settlements For CT Personal Injury Claims

A structured settlement is paid over time through scheduled payments. It is often funded through an annuity provided by a third-party insurance company. These payments can be customized to meet specific needs, such as monthly income or larger payouts for medical care at certain intervals.

Benefits of Structured Settlements

• Steady income over time: Helps with long-term budgeting and reduces the chance of spending the funds too quickly.
• Customizable payment plans: Payments can be tailored to align with expected costs, such as therapy or college tuition.
• Tax benefits: In most personal injury cases, the interest earned on structured settlements is also tax-free.

Limitations to Consider

• Less flexibility: You won’t have immediate access to the full settlement if an emergency arises.
• Dependence on payment schedule: You must wait for scheduled payments, which may not align with your financial needs at all times.
• Once locked in, it's difficult to change: You can't renegotiate the payment plan later.

What Does Connecticut Law Say About Personal Injury Settlements?

In Connecticut, settlement agreements are enforceable contracts. Once you accept a settlement—whether lump sum or structured—you generally cannot go back and ask for more money, even if your condition changes. That’s why it’s critical to evaluate both options carefully before signing.

Structured settlements are often recommended for:

• Children or minors involved in personal injury claims
• Victims with permanent disabilities or long-term care needs
• Individuals who may need financial protection from creditors or themselves

In some cases involving minors, Connecticut courts may require judicial approval of the settlement and may prefer structured payments to safeguard the child’s financial future.

How to Decide Which Option Is Right for You

There’s no one-size-fits-all answer. Here are a few questions to guide your decision:

• Do you have urgent expenses that require a large sum now?
• Will you need consistent income over the next several years?
• Are you comfortable managing a large amount of money or would a structured payout provide more peace of mind?
• Are you working with a financial advisor to plan for taxes and investments?

Many attorneys recommend working with a certified financial planner who has experience in settlement planning. They can run projections based on your medical needs, cost of living, and lifestyle to help you make an informed decision.

Real-World Example

Imagine a Connecticut resident who suffers a spinal cord injury in a car accident. A $2 million settlement offer is on the table. If the individual requires lifelong care and modifications to their home, a structured settlement might provide monthly payments for care and periodic lump sums for larger expenses.

On the other hand, someone who is recovering and planning to return to work may prefer a lump sum to pay off medical debt, invest, or pursue job retraining.

Call Brandon J. Broderick For Legal Help

Choosing between a lump sum and a structured settlement is a major financial decision that can affect your life for years to come. At Brandon J. Broderick, Attorney at Law, we guide personal injury victims in Connecticut through the entire process—from negotiating a fair settlement to helping you understand the best way to receive it.

Our team works with financial professionals and legal experts to help you evaluate all of your options. Whether you’ve suffered a serious injury or you’re helping a loved one plan for the future, we’re here to support you.

Contact us today for a free consultation and let’s talk.