What is Structured Settlement: How It Works: Advantages and Disadvantages 2019

What is Structured Settlement?

Structured Settlement is a process in which claimant get financial or insurance arrangements to resolve his case and injury through periodic payments on scheduled date rather than lump sum which he gets on the spot.

Structured settlement


In most of the cases of structured settlement defendant is seem to offer structured settlement rather than person who is suffering. Sometimes person who is suffering (plaintiff) ask defendant to pay him to resolve the issue or case.
 
The conditions of this settlement is Clear that the both parties should get agreed on terms of settlement. If one party offer to settle issue on some terms and policy than other party should also be agreed on that terms of that person.

Structured settlements become the part of statutory tort law including different common laws countries included are like United States, Canada, Australia and England.

When Structured Settlement was used For the first time?

Structured settlement was made in use for the first time in Canada for the settlement of Claims is made on behalf of the children who is affected and suffering from thalidomide. First time this settlement is used because of this but nowadays structured settlement is getting used mainly for pharmaceutical cases and for Product Liability, Many people think the process is enough to make them satisfied with justice.

What is the Legal Structure of Struggle Settlement and How it works?

Basically it works through different processes but mainly in structured settlement what we see is: A Claimant comes to a negotiated settlement of a tort suit with the person who is Defendant to get a settlement as a consideration. in exchange for the claimant's securing the dismissal of the lawsuit this works as an agreement that defendant gives and in that he tells that he will make a series of periodic payments.

If the Claimant wins the case against the Defendant than defendant has to pay amount that is structured for that issue or injury on some scheduled dates or periodic payments.

The Defendant and Claimant both first decide and structure that how much payment should be made and for how long it should be structured.

The Defendant gives money to the assignee to but a annuity for the plaintiff.

Then the qualified assignee purchase a annuity through Life Insurance Company than the part comes of setting up the annuity contract as same as settlement is designed. They should be same because if the difference occurs than it is not the legal and proper contract as per law, once these contract is made they cannot be changed again.

Than the Life insurance company pays the plaintiff a series of payments over time, the annuity earns interest to protect its value.

So, The best part is this I have some best benefits of Structured settlement for you, these points will help you to Decide that you should go for this settlement or not so let's move to benefits.

Benefits Of Structured Settlement:

1: The Best part of Structured settlement is there is no space of tax means no need to pay tax even though this process make people earn their interest but this process not counts as to pay tax.


2: Income that is earned from structured settlement does not affect your eligibility for medicade and social security disability.


3: There is no boundation on time period payments of settlement can be made for many years and as long as ago requested. There is no boundaries of time limit a person can request payment as he wants. Or they can get lump sum payouts from them as well.


4: There is no Loss of payments because the insurance Company who issued the annuity guarantees to pay the amount in every situation of their span. If they get insolvent than also they will continue to give payments, and I think this is also a big benefit of structured settlement because there is not loss of anything.


5: Financial market do not affect structured settlement, For Example: Mutual Funds, Bonds and Stock if they get fluctuate in financial market than it will not affect your contract because as per the rules the amount and payment which is decided to pay as per law suit is must be paid to the person who is claimant.


Now, in life there are two sides of everything so in this case also we have two sides means if there are Advantages of structured settlement than there is disadvantages also in structured settlement. So let's move forward to some disadvantages that will help you in your process.

Disadvantages of Structured Settlement:


1: The Biggest loss in this whole process that I find is you can't change the terms once it is finalised, If you want to change something you will bounded for that. You cannot change or renegotiate terms if your financial situation changes or economy changes.


2: Some Parts of this process (settlement) Can be taxed such as attorney's fees and Punitive Damages, So be aware of what actions you are taking, this process is works in many different ways so First take knowledge on this whole topic, Before taking any action.


3: The Payments of structured settlement cannot be accessed Immediately and you cannot force to access them Immediately according to law suit. So the point is Read all terms before coming to any decision. And one more thing you cannot Invest all that money you received from settlement, and you cannot put that money into the things that gives you Higher rate of return.

There are Some Structured Settlement Options available to Choose from:


1> Lump sum settlement consideration.

2> Start and End Dates

3> The Flexibility of Structured settlement

4> Payments frequency and amount.

Does this article sounds helpful to you, I tried to Give you every single information that will be needed in the process of settlement. I provided a basic information that will help you to know how this structured settlement process actually works. If you are finding any issues related to this article than make sure to mail us at [email protected] We will help you out with your Described issue.