Understanding Structured Settlement
Posted On Friday, November 26, 2010 at at 10:30 PM by Lord SylarMost of us know about Structured Insurance Settlements but don't know what it is.
A structured settlement is a kind of financial deal/settlement that a petitioner receives to conclude a personal injury claim or, to receive installments from the guilty instead of single lump sum. People generally go for structured settlements or future financial stability.
Structured settlement payments are sometimes called periodic payments and when incorporated into a trial judgment is called a periodic payment judgment.
When someone wins a court lawsuit, it is the defendant who pays the settlement amount. If a structured settlement is chosen, defendant has to pay in installments over time instead of a single lump sum. If structured settlement is chosen, the installments will be decided by the court if the plaintiff and the defendant can't be agreed upon on the interval and amount of installments.
Let’s say, Mr X has mesothelioma caused by asbestos. He sues the asbestos manufacturer, who then agrees with Mr. X to settle outside the court. The amount is set, lets say Five Million Dollars Mr X gets a check for Five Million Dollars. That is the first option, but a structured settlement might make more sense depending on the receivers situation and needs. A structured settlement gives him the money in regular installments in specific interval over time instead giving the plaintiff a lump sum of cash once.
Installment payments can be structured in different ways to suit his requirement and also to save him from money inflation in which case he would become a victim and eventually have less money. This can also reduce the tax he has to pay for a lump sum. Settlement options can range from simple to more complex depending on what the petitioner wants or feels comfortable. It might be simply monthly or yearly or any interval the plaintiff wants. Or a lump sum first, then monthly, yearly or any suitable interval for the petitioner.
A structured settlement is a kind of financial deal/settlement that a petitioner receives to conclude a personal injury claim or, to receive installments from the guilty instead of single lump sum. People generally go for structured settlements or future financial stability.
Structured settlement payments are sometimes called periodic payments and when incorporated into a trial judgment is called a periodic payment judgment.
When someone wins a court lawsuit, it is the defendant who pays the settlement amount. If a structured settlement is chosen, defendant has to pay in installments over time instead of a single lump sum. If structured settlement is chosen, the installments will be decided by the court if the plaintiff and the defendant can't be agreed upon on the interval and amount of installments.
Let’s say, Mr X has mesothelioma caused by asbestos. He sues the asbestos manufacturer, who then agrees with Mr. X to settle outside the court. The amount is set, lets say Five Million Dollars Mr X gets a check for Five Million Dollars. That is the first option, but a structured settlement might make more sense depending on the receivers situation and needs. A structured settlement gives him the money in regular installments in specific interval over time instead giving the plaintiff a lump sum of cash once.
Installment payments can be structured in different ways to suit his requirement and also to save him from money inflation in which case he would become a victim and eventually have less money. This can also reduce the tax he has to pay for a lump sum. Settlement options can range from simple to more complex depending on what the petitioner wants or feels comfortable. It might be simply monthly or yearly or any interval the plaintiff wants. Or a lump sum first, then monthly, yearly or any suitable interval for the petitioner.