Catastrophic Injuries And The Role of Structured Settlements

Written By: Ali Mendiola

Every day, accidents, sometimes fatal, occur in the workplace. As a structured settlement broker, I see the aftermath of these incidents and their long-term impact.

While settlement funds can't make someone with a catastrophic injury whole again or bring back a deceased family member, they can give families the ability to plan their future with the peace of mind of knowing that their financial needs will be met.

For the permanently injured, going back to work and earning a wage is no longer an option but supporting a family and paying bills are still top of mind. In these kinds of cases, the settlement money must be structured in a way to not only cover today's expenses but also last a lifetime. A popular option we see is for a worker to elect to receive a portion of the settlement upfront to pay pressing medical bills while creating a monthly payment plan to cover recurring costs.

In one case, a 26-year-old refinery welder began working on a pipeline that was not completely shut off. As he started to cut the pipe with his torch, an explosion occurred and he was engulfed in flames. He suffered third degree burns over 80 percent of his body and is now permanently disabled. His case settled for $7.5 million. He'll need extensive medical care for the rest of his life. After reviewing his short and long-term medical and living expenses and actuarial life tables, our firm set up a structured settlement that will give the young man $500,000 cash upfront and $25,000 a month for at least 20 years, guaranteed for life.

Although this a horrific incident, both parties were satisfied with the settlement terms since the money will provide sufficient financial support to the victim and his family now and in the future. 

What's amazing with many of the cases that come to our office is that a job doesn't have to be particularly dangerous for a life-changing accident to occur. In one case, a hotel worker was performing her duties when she accidently slipped while going down stairs. The fall caused neck and back injuries. Two unsuccessful neck fusions later, she was deemed 100 percent disabled. She will need medical treatment throughout her life. She agreed to settle her claim quickly so she could have complete control of her medical treatment without waiting for medical authorizations from an insurance carrier. Her claim settled for $2.6 million. We structured her claim so she would receive $150,000 cash upfront for medical costs and $5,000 per month for at least 20 year, guaranteed for life.

A particularly devastating case involved a young bank security guard who was shot and killed by a robber. His wife was pregnant at the time. After the child was born and a DNA test conducted, each side agreed that the spouse and child were entitled to death benefits. Since the child was born with a genetic disorder and would need constant care, both parties decided that there would be no cap on the child's benefits. The structured settlement was $150,000 cash upfront to the wife and $3,800 a month for the life expectancy of the child. The mom now has the financial means to stay home and care for her child while knowing his long-term financial needs will be covered.

These type of cases remind me that life is fragile, but they also show that injured clients need an advocate on their side to ensure they receive settlement proceeds in a way that allows them to live their best life.

Alejandra (Ali) Mendiola, a California-based structured settlement specialist with more than 10 years experience. She structures settlements of all sizes from short-term, under $50,000 structures to multi-million-dollar lifetime structures. Reach her at 213-344-4834,  AMendiola@Atlassettlements.com.