Structured Settlements Explained

By: Paul R. J. Smith
Submitted: 2007-01-17 16:16:43
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A structured settlement is a plan in which you receive payments over a set period of time instead of receiving a lump sum of cash; you will receive payments weekly, monthly or even yearly.

Structure payments are most often used when a large amount of money is the issue such as jackpot lottery winnings where you are usually given the choice of receiving a number of smaller amounts of money over a period of time.

Insurance payouts can also be taken in this way and also it is commonly used in cases of malpractice, where a family member family has been severely injured or even lost. Payments may then be awarded to those left behind over the victim’s life span.

The Pros and cons of structured settlements

A large cash sum can sometimes have the advantage over structured payments particularly if the money is needed there and then, say if it is an insurance payout where most of your household content has been destroyed and the money is needed to replace everything then structured payments can be a bind.

Another thing to bear in mind is that the value of the pound is likely to decrease over a long period of time so what started out as a satisfactory amount per month at the beginning of the structured payout will become less over time. Several options are available though to those having been awarded a structured settlement but good advice is needed before acting on any of them.

A structured settlement broker’s advice may be the wisest choice for most of us in making sure we get the most from our settlement. On the other hand a structure settlement is much easier to manage providing you can live easily on the amount of money coming in each month, this will usually pose no problem as the beneficiary’s needs will have been ascertained before the award made.

Structured payments are particularly helpful for those who have received money by way of an accident and are unable to work; it gives a sense of security knowing a set amount will be paid each month. Structured payments are preferred for obvious reasons by the party paying as no lump sum has to found immediately.

Selling Your Structure Payment plan Should you wish to do so there are options available to you for turning you structured payments into a cash sum, here advice should be taken and in most cases a structured settlement broker’s advice should be sought.

An important thing to consider before taking the decision to sell your payment plan is that the broker will of course have to benefit from it and his profit will be taken from your money.

Once all avenues have been explored and you have made the choice of selling your structure plan then shop around, see several different brokers’s and make sure they are reputable. Never jump at the first offer that is made and if in any doubt seek the help of a solicitor before making any decision.

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