What Are Personal Injury Claim Structured Settlements?

A structured settlement, in the most basic definition, is an arrangement made with a plaintiff in a personal injury lawsuit that allows the plaintiff to recover their judgment over a longer stretch of time instead of as a single lump sum payment. There are specific reasons why a structured settlement can be a very good option, and there are situations where a structured settlement probably isn't worth it.
First off, it's important to understand the overall benefits of a structure settlement. With a structured settlement, you are not required to pay taxes on the disbursements. This avoids the large tax payment you would probably need to make on a lump sum payment.
Receiving a lump sum payment can also make you a target. Whether it's a long lost relative who suddenly has a need for cash, or whether it is a con artist that follows court proceedings to find potential victims, a structured settlement helps you avoid some of the hazards of a lump sum payment.
A structured settlement can also help provide security to you. With a lump sum, there is always the danger that you could make a poor investment and lose it all, or that you could simply overspend. A structured settlement insures that you receive compensation over the long haul.
On top of all of that, a structured settlement can also be beneficial for the defendant. In many cases, a defendant may not have enough to pay a lump sum. This can help to insure that you'll actually receive your payment.
There are many factors that should go into the decision on whether or not to accept a structured settlement. For example, if your ability to work has been diminished because of the personal injury, you may definitely want to consider a structured settlement. The same is true if it is expected that your health will continue to deteriorate over time. If your medical liabilities will increase, it is important to have a way, in the future, to cover them.
On the other hand, if you have accrued a large amount of debt as a result of your personal injury, it can be worth considering a lump sum payment. Also, a lump sum payment may allow you to, over time; actually receive more money if you can invest it wisely. Weighing all of these factors with your family, attorney and financial planner can help you decide whether a structured settlement is right for you.