A personal injury settlement is (reimbursement) of the (total) cost of the medical bills, "any" lost wages, then (adds) pain and suffering. So, whatever the insurance paid plus any co-pays or deductibles is the total cost that is owed back to (whoever) paid for the medical treatment due to the accident.
It appears you will have (3) settlements, which would be your wife, and guessing (2) sons. If the 2 sons are minors and depending on the amount they settle them for, then (might) be put in a trust pending when they become adults (age 18) or older.
Each settlement will be based on the type of injuries, be it minor or serious. If the sons were treated at the ER and then released, then those settlements wont be very big. But if anyone had additional treatment, rehab, or had surgery, or broken bones etc, then will be worth much more.
Right now, your lawyer has sent out his/her demand for (each) to settle, thus my guess is that this will take at least a week to a month to settle (all). Usually insurance will want to settle all of them at one time. Lawyers love to make big demands on the amount they (hope) to settle, so don't get excited on how much the lawyer had made the demands.
Now when both the insurance and your lawyer agree on the settlements, then your lawyer will take 33% of (each) settlement.
So as an example of a settlement for $12,500. The medical bills total $3,500, the lawyer takes 33% ($4,166.66) which leaves $4,833.34 to the client.
When the lawyer gets an offer, then the lawyer if obligated to inform the client of the offer. Then most likely the lawyer will counter the offer with a higher offer than the insurance. It can go back/forth till both agree on an amount. IF, both can't agree on an amount, then at that time, most lawyers will file a lawsuit. If a lawsuit is filed, then odds are won't settle for months/years from now.
retired insurance adjuster