Structured settlements benefit more than 30,000 US recipients each year by providing security, peace of mind, and protection. The arrangement guarantees periodic payments over a person’s lifetime.
This payment arrangement provides several services. The services include covering medical costs and other personal costs. In the case of an injury, victims get periodic payments. Such a plan helps the victim live a normal life.
Many Americans don’t understand how a structured settlement works or the benefits it offers. As a plaintiff, choosing a periodic payment plan can be a great option. Factors such as tax liability determine your ability to get periodic structured settlements.
What Is a Structured Settlement? Here’s What You Need to Know
A structured settlement is a periodic payment set up by an insurance company after a lawsuit. Structured settlement cases occur due to various instances such as wrongful death, personal injury, worker’s compensation, or medical malpractice.
When a large sum of money gets awarded, the arrangement works out great for the person that receives the settlement.
How Does a Structured Settlement Work?
A structured settlement takes place after reaching an agreement with the defendant. The company transfers the payment to an insurance firm dealing with structured settlements. It is important to look for a stable firm with experience handling such payments.
The instability of a firm is one of the risks that can affect a structured payment.
The parties involved can negotiate the terms in the structured settlement. The factors include the frequency of payment, the structure’s length, and the future of such an arrangement. Depending on your needs, you can opt for large initial payments or the sum of money to increase.
In a structured payment, the plaintiff can decide on the approach that seems suitable.
Defendants buy annuity settlements from reputable insurance companies to enable the structured payments. Opting for an annuity is more beneficial to a plaintiff compared to depending on the defendant’s corporations. These annuities are subject to complex regulations. Understanding these regulations is important, which is why it pays to have an experienced lawyer.
The structured settlement option has a myriad of advantages. The money received through the structured settlement is not taxable. Additionally, the periodic payments reduce cases of misusing the money.
What If You Need to Sell Your Structured Settlements?
Selling structured settlements is not a new aspect. There are several companies that buy structured settlements and there are many reasons for opting to sell them. They include buying a house, renovations, or debt reduction.
You will need several documents to sell your annuity settlement. They include court judgments, annuity contracts, and relevant case documents. Money management skills can be essential when selling structured settlements.
Structured Settlements Have Many Benefits as Compared to One-Off Payments
Attorneys should guide the plaintiffs on this important issue of compensation. When someone doesn’t have a stable income, a structured settlement can be helpful.
When a need to sell arises, one should receive proper guidance to protect their money.
Check out our blog to learn more on structured settlements and other legal matters.
