Structured settlements are types of compensation payouts that are specially designed to give a series of regular payments rather than one big one. This method of making compensation payments is very popular with the companies that are legally obliged to make them -- whether they themselves accept liability or whether they are ordered by a court to make a payment.
The reason that structured settlements suit many companies that need to pay compensation is basically all about their up front costs. If an insurance company, for example, is ordered to pay you $1 million after an accident then they technically have to find this money to pay you outright once the ruling has been made by the court.
If, however, you accept a structured settlement payment that gives you a set of payments of $100,000 a year until the settlement is done then the company has lower initial costs. Here, they will generally buy annuities that take their invested money and pay out the income to you according to the terms of your agreement.
For many people, getting a regular set of payments is more attractive than a lump sum as they simply find this more manageable than having to deal with investing a large sum of money for themselves. It can actually be less stressful for them to deal with a regular smaller payment. This kind of settlement can also be made before a case goes to court, allowing you to settle your case without the need for court time and costs.
You can also work to set up a structured settlements agreement to suit your own financial needs. Some people, for example, like to have a payment made every year whilst others will accept payments every two years or to some other schedule that suits them better.
In some cases you can go down this settlements route but then decide that you actually would quite like a lump sum payment instead. If this happens then you can look at selling on the annuities that are the investment base of your payments here to a third party.
By doing this the third party will make a lump sum payment to you in return for your annuities. They will then retain control of the annuities themselves and will be given any benefits that they pay out according to your original schedule. You can look at selling just part or all of your holdings here depending on your preference.
It is important to try and make sure that you get qualified legal advice before agreeing to any structured settlements agreement. You need to make sure that the agreement gives you the best possible terms and you may find the help of a structured settlement broker useful to you in this kind of situation.
These brokers are specialist advisors who can work with you to negotiate and broker the best deal from the company that has to pay your compensation. They are not to be confused with other kinds of structured settlements brokers, however, who purely work on helping people find buyers for structured settlements that are already in place.
The reason that structured settlements suit many companies that need to pay compensation is basically all about their up front costs. If an insurance company, for example, is ordered to pay you $1 million after an accident then they technically have to find this money to pay you outright once the ruling has been made by the court.
If, however, you accept a structured settlement payment that gives you a set of payments of $100,000 a year until the settlement is done then the company has lower initial costs. Here, they will generally buy annuities that take their invested money and pay out the income to you according to the terms of your agreement.
For many people, getting a regular set of payments is more attractive than a lump sum as they simply find this more manageable than having to deal with investing a large sum of money for themselves. It can actually be less stressful for them to deal with a regular smaller payment. This kind of settlement can also be made before a case goes to court, allowing you to settle your case without the need for court time and costs.
You can also work to set up a structured settlements agreement to suit your own financial needs. Some people, for example, like to have a payment made every year whilst others will accept payments every two years or to some other schedule that suits them better.
In some cases you can go down this settlements route but then decide that you actually would quite like a lump sum payment instead. If this happens then you can look at selling on the annuities that are the investment base of your payments here to a third party.
By doing this the third party will make a lump sum payment to you in return for your annuities. They will then retain control of the annuities themselves and will be given any benefits that they pay out according to your original schedule. You can look at selling just part or all of your holdings here depending on your preference.
It is important to try and make sure that you get qualified legal advice before agreeing to any structured settlements agreement. You need to make sure that the agreement gives you the best possible terms and you may find the help of a structured settlement broker useful to you in this kind of situation.
These brokers are specialist advisors who can work with you to negotiate and broker the best deal from the company that has to pay your compensation. They are not to be confused with other kinds of structured settlements brokers, however, who purely work on helping people find buyers for structured settlements that are already in place.
About the Author:
Allie Sanchez helps people learn about selling structured settlement at her website on selling structured settlement.
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