Very few people understand how common personal or workplace injuries are. In a single year, nearly 25 million Americans visit the emergency room for an unintentional injury.
Injuries occur in all walks of life. They occur at work or while operating a motor vehicle. Sometimes, injuries happen when shopping at a store. In 2018, there were nearly 3 million nonfatal workplace injuries and illnesses.
In many of these cases, personal injury is due to negligence. Seeking out financial justice, many victims turn to structured settlements.
Read on to learn all about this form of lawsuit settlement. Explore the structured settlement process so you are fully up to speed.
What Are Structured Settlements?
Many people who are injured in a car accident or at work turn to the justice system for relief. In many cases, the result of a personal injury lawsuit is a financial settlement.
Instead of allowing the judge to decide, both parties mutually agree that a settlement is warranted. This ends the court case and allows both parties to move forward.
Some plaintiffs elect to get their financial settlement in a single lump sum. Others opt for a structured settlement instead.
Many people are familiar with the JG Wentworth lump sum commercials. Plaintiffs are discovering that the structured settlement approach results in a greater cash payout.
A structured settlement provides financial relief to the plaintiff in the form of installments. The two parties agree to a payment schedule. This means that you can receive payment on a monthly, quarterly, or even annual basis.
What Are the Benefits of a Structured Settlement?
There are a few different benefits to opting for a structured settlement. For one, the installment schedule serves as a steady flow of income.
Another benefit is that the payments are received tax-free. In the event that the plaintiff passes away, they can designate a beneficiary to receive the installment.
An additional benefit is that the installment payments are not impacted by changes in the stock market. You can even treat the payments as an asset and sell your annuity policy in a marketplace.
What Is the Structured Settlement Process?
The process is not easy and requires assistance from a professional. The first step is working with a consultant to draw up the settlement terms.
Once both parties agree, the consultant purchases an annuity from a life insurance company. The annuity is not managed by an at-fault party like your employer.
Instead, the life insurance company manages the annuity. This is a positive as it significantly reduces the risk to the policy amount. Macroeconomic conditions or stock market fluctuations are no longer a factor.
Structured Settlements: A Recap
For a long time, the conventional wisdom was to take a lump sum as a personal injury settlement. However, a structured settlement gives victims an alternative with many benefits.
Victims enjoy receiving fixed installment payments over a longer period of time. Managed by a life insurance company, these payments are shielded from adverse economic conditions.
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