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What Are the Benefits of Choosing a Structured Settlement?

27 January 2020 No Comment

We are lucky to live in a country with a strong legal system that protects us. While the system hasn’t always worked, it still stands strong and provides an outlet for many to seek grievances and find justice.

If you’re looking to receive compensation from a case that you bring forward, it’s best to consider getting your money in the form of a structured settlement. This is the most common way that money is paid out from a court case.

What are the benefits of going this route, as opposed to a full lump sum payment? Read on and we’ll walk you through what you need to know.

What Is A Structured Settlement?

At the end of a civil case, there may be a lot of money owed to the plaintiff from the defendant. In these cases, a payment plan for this money needs to be discussed. Smaller payments may be given as one lump sum, but larger payments are often split into a stream of payments over time.

This reoccurrence of payments over a set period of time is what is known as a structured settlement. The requirements of the settlement will be determined by both the plaintiff and the defendant, as well as a legal assignee.

Together, they will decide on the size of the payments, how long they should last for, and if there are instances where they should be supplemented for larger amounts. This is all put into writing and can be referenced over the months or years that the structured settlement is in place.

The money is put towards an annuity, which is an insurance that helps ensure that the payment in question will be kept up with. The insurance company is then the one that will pay out the agreed-upon amounts.

Benefits of a Structured Settlement

There are many reasons why the winner of a civil case might prefer to go with a structured settlement.

For one, it better guarantees that all the money that is owed to them will actually come in. The defendant might not have immediate access to all the funds they need to pay back the plaintiff at the end of their court experience. Spreading out the payment over time will ensure one is not short-changed upfront.

That’s not all, however. Having the money come in the form of spread out payments will also help the plaintiff to better manage the money. It is much easier to responsibly spend money if it’s coming in portions than if it is all dumped on you at once.

For these reasons alone, a structured settlement is often the preferred choice if financial stability is a priority.

Choosing The Right Payment System

If you’ve recently won in court, you’re probably on cloud nine. It’s important to understand the benefits of a structured settlement if you’re planning on receiving your compensation soon. The above information can help.

Need more legal advice? Check out our blog for more.

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