What is a Structured Settlement? Meanings and definition reloaded

A structured settlement loan is an amount of money given out to someone who has filed a claim for an injury caused on him/her. What this means is this. If Uncle Tim went to watch football at the stadia and he was knocked down by a car in which he sustained an injury. The driver and owner of the car will pay Uncle Tim a certain percentage every month.  The amount to be received or paid for is known as structured payments or settlement.

Structured payments are determined after a victim has contacted his accident lawyer and the claim has been awarded by the jury.

For some, this comes as good news since each payment could be structured to be payed monthly or quarterly.

However, some types of structured funding could be paid annually or given out as a lump sum if the winner of the claim opts out and chooses this route. If this is the case, he has to go through structured settlement companies who will also take their share

The reason why these payments are structured is to enable the victim and the payer has a relief as not everyone may be able to pay a lump sum amount. The illustration given here is that when the claim is about a million dollars, it can be spread over some years so that it could be paid in few thousands every month. This makes it easier for both parties.

Finding out what is a structured settlement is never an easy thing. There are so many definitions about this.

Benefit why you need to know what is a structured settlement

A lot of people who were injured have suffered many things. In a situation where some parts of the body could no longer be used regularly, such persons never recover from their pains. So this money paid in installments will be of a great help. So there are many benefits to find out how you will tread this path.

It can remove the long decision to spend a lump sum wisely.

When accident victims are given a lump sum money, they may not know how maximize its usage. However if they are paid in installments, then they become accustomed to this.

Poor spending habits of many are adjusted when these payments appear on time and in a steady fashion.

Understanding that one need to carefully plan the expenditures made with these money is a step in the right direction. It’s never easy to have so much money and never spend out of it. Its take a steady habit of keeping money for future expenses to come out of debt.

All am trying to say is that some people receive this money and are not able to mange them.

So what is a structured settlement and how does this affect you? Will you choose the lump sum form of payment or you will rather go with the annuity settlement plan? I believe this depends on your geographic  area.