Structured settlements are structured money payments via an annuity theme that is normally established to compensate claimants for their losses (mainly because of injuries). Introduced in United States in the early 80s, structured settlements stand as an alternate to giant lump add cash settlement.
When structured settlement payment is applied?
Commonly, structured settlement is most suitable for injury case where the victim's life is affected in long term. For fast:
- Injuries that required long term medical treatment.
- Injuries that cause lost of working ability.
- Injuries that cause permanent or temporary disabilities.
- Fatal accidents, where regular monetary support is required for the surviving family.
Benefits of structured settlement
Despite best intentions, lump total payments are perpetually wasted in an exceedingly short time once the cash is received. In most cases, payment receivers are overwhelmed by the big pile of cash and usually pay it wildly like lottery winners.
Inexperience in managing such an enormous amount of cash made them place up unrealistic investment and getting useless luxurious. Cash meant for covering the claimants' life in long term is usually dissipated, leaving the person while not the means of self support or applicable care.
As half of the national intentions to encourage structured settlement system usage, related tax laws had been extended in the favor of structured settlement receivers. Ultimately, structured settlement makes more financial sense to the claimant because the structured income isn't taxable at the moment of writing. Additionally, structured settlement payments don't affect social security benefits. This implies, the money a private can receive from Social Security can be additional per payment. More over, claiming structured settlement is cheaper and faster as the system eliminates the necessity of lengthy court room procedures.
Disadvantages of structured settlement
There are each professionals and cons in structured settlement system. For those who cannot manage the money properly, structured settlement means that protection.
But, for those that can, structured settlement means that limitation. Common financial senses, with such massive sum of money you'll be able to undoubtedly jump start your new business or investment plan. You may have gain a heap more from the money by simply parking them in blue chips stocks or a smart mutual fund. Or a lot of over, paying back your home mortgage to save up long run interest charges would have earn you more.
With this, I'm not surprise to see that a lot of and a lot of monetary establishment is currently concerned in buying back structured settlements from the recipients. Structured settlement recipients nowadays would like not to wait for 10 - 20 years to urge back their settlement money. Instead, the long run settlement payment will be sold, in exchange of a huge lump add of instant cash.
Author Resource:
Riley Jones has been writing articles online for nearly 2 years now. Not only does this author specialize in Structured Settlements, you can also check out his latest website about:
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")