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: Settlements
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Structured
Settlement or a One-Time Lump Sum Payment?
By Greg Smith
If you are involved with a legal decision, financial claim
or insurance arrangement, the financing process to settle
and resolve the claim can often take two forms. Either
a one-time lump sum payment, or a long-term periodic series
of deferred structured settlement payments. But which
is best for your situation? Learn more at http://www.settlements-i.com/
A structured settlement involves a financial or insurance
arrangement which includes a periodic stream of payments,
that a claimant or plaintiff accepts in order to resolve
a personal injury claim or other legal case. They were
first utilized in Canada and the United States during
the 1970s as an alternative to lump sum payments and are
now part of the statutory tort law of several common law
countries.
A structured settlement is a deferred payment method
for compensating injury victims, and is a voluntary agreement
between the injury victim ( plaintiff ) and the defendant.
The plaintiff will receive the monetary payout over the
course of a number of years through this deferred payment
agreement. Under a structured settlement, an injury victim
does not receive compensation for their injuries in one
lump sum, but rather, they will receive a stream of tax
free payments designed to meet future expenses and living
needs. This type of compensation method is becoming more
popular in a wide variety of legal cases.
The benefits of a structured settlement over a lump-sum
payment include the security of a guaranteed long-term
income with deferred payments that are exempt from income
taxes. The federal government encourages the use of structured
settlements in personal injury cases. Structured settlements
also attract support from plaintiff attorneys, state attorneys
general, legislators, consumer and disability advocates.
Structured settlements can be ideally suited for cases
with:
• Persons with temporary or permanent disabilities
• Guardianship cases that may involve minors
• Workers compensation cases
• Wrongful death cases
• Severe injury
Want to Sell Your Structured Settlement?
Not everyone benefits from a long-term payment situation
and some may want or need a lump sum instead. The owner
of a structured settlement, such as lottery winners, medical,
insurance, accident and lawsuit settlement owners, can
often sell their rights to the deferred payment stream,
in exchange for a one time lump sum payment from a variety
of financial institutions. All situations are different,
and as with any legal issue, you should always consult
your attorney.
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About the Author:
Greg Smith is the publisher of the informational web site
on Structured
Settlements at http://www.settlements-i.com/. Visit
his web site for the latest on settlements of all types.
This article may be freely reprinted as long as the author's
resource box and URL links remain intact.
Resource directory.
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