Well... average life expectancy of a male in this country is about 76 years. Assuming you plan to make it even close to that, and want to be done working before, say, 60, I'd take the monthly payments over the bulk. Bulk payment with 5% returns is only $14,750 a year versus $26,400 a year from the payments... while inflation will hammer that as time goes on, it's still the better option unless you can somehow generate returns very near 9% or greater per year. The difference in this scenario is $11,650 per annum... times the 24 years you would reasonably expect to live, that's $279k given up. About the same as the lump sum plus one extra year.
OTOH, if you think you can preserve the $295k capital and not touch any of that money or the profits from investing it for 11 years (work until medicare age at 63), and yield 5%... Then you'd be looking at $505k in capital generating $25,227 a year.
If you freeze it until you're 55, the numbers change a bit, but the monthly payment is far more appealing than the bulk sum at that point, at least in my opinion. Here's a quick spreadsheet that charts out some of the difference and makes it easy to visualize where I am coming from.
I understand your desire to have something to show for your 22 years of law enforcement, and this may come off as a bit harsh, but you really should have just worked the old job a couple years longer if you wanted a nice, new car... $26k a year times two years, even after taxes, is enough to buy a pretty nice brand new car. Sometimes you need to put aside desires (buy a new vehicle) and face realities (opportunity cost of that vehicle).
Just for arguments sake, let's say you take the bulk payment and buy a new vehicle priced at $30k. The top two charts show the bulk sum and expected returns if you don't touch the capital. The bottom two show the bulk sum and expected returns if you immediately spend $30k to buy a new vehicle.
So either way you opt to do it, that new car ends up costing you ~$200/mo in income (based on my assumptions) down the road. That's a pair of round-trip plane tickets to Belize every year, with enough money leftover to pay for some great food.