Although a common occurrence, most people have no idea what structured settlements are. That's our focus in this article, to go over the definition of structured settlements, who they can benefit, and how to make them work for you. There are all kinds of reasons why people may be awarded settlements.
Sometimes the insurance company awards them, or they win a court case, due to negligence, discrimination or some other factor. Whatever it may be, you can receive the sum of your claim in a variety of different ways. One option is to take the claim delivered in one sum.
In cases where the settlement is small, say $10,000 or less, this is the usual option that people take. But when settlements are much larger than this, what do they do? Oftentimes it is not wise to take a large chunk of money all at once. Taxes on large sums of money may drive you crazy.
But more importantly, most people will mismanage large chunks of money if they've never had them before. These are only two of several reasons why it's not always smart to take your settlement all at once. The solution is to set up a structured settlement. With a structured settlement, your offer the option of being paid your settlement in installments, over a certain length of time.
You can even create the payments to cover you the rest of your life, if your damage will affect you for the rest of your life. This way you know you will have a guaranteed source of income every month. You don't have to take a structured settlement only in divided, equal payments. If you have a large debt, you can take a certain percentage of your settlement up front, and leave the rest to be paid in installments.
This is perfect for people who need to take care of an expense right away and still want to receive the benefits of a monthly payment as a source of income. Inflation is also taken into consideration, when structured settlements are set up, and payment sent out. Otherwise, you wouldn't get the same buying power with your payment 10 years from now as you currently are getting.
To sum it up, these are your options that are involved when being awarded a large sum and setting up a structured settlement. Compare this to receiving your money all at once. It might just be more wise for you to set up a structured settlement.
Author Steven Ross is a long-time Structured Settlement fan and can help you with all your Structured Settlement questions. For Structured Settlement advice visit his new site at Structured-Settlement-Report.com