In certain circumstances, the injured party in a personal injury case can choose to take a lump sum payment for his or her injuries or opt for a structured settlement. Many people choose the lump sum payment, but the structured settlement has many benefits that are worth considering. Before making your decision, here is what you need to know about structured settlements.
When Are Structured Settlements Offered?
In some personal injury cases, some serious injuries result in the need for future medical treatment, permanent disability, or other future damages. Future damages can include loss wages due to the need for medical treatment because of the original injury.
Once you sign your settlement agreement, you cannot sue the insurance company nor its client again for any future damages you have. However, the company is still liable for those damages. To cover part or all the future damages, you can settle with the insurance company for a certain sum that addresses your current expenses and the estimated cost of future damages.
You can choose to take the settlement amount in a lump sum payment and be responsible for managing the funds yourself. Alternatively, you can opt for a structured settlement, which would pay out part of the settlement over specified period.
Why Choose a Structured Settlement?
Structured settlements have grown in popularity and with good reason. There are many benefits, including the fact that the payout is paid out in the form of an annuity, which can sometimes be tax-free. The annuity can even help to grow the sum you receive through investments.
The settlement also offers flexibility. You and your attorney can structure the settlement to pay out when you need it. For instance, you can opt to take a large payment at the beginning to help cover your medical bills and other expenses you have now. Future payments can be paid out equally over a set number of years or you could opt to increase or decrease them over time.
Are There Drawbacks?
Structured settlements are not perfect. There are some flaws, such as the payouts not being enough after changes in the economy occur. For instance, a recession could mean that your payout is not enough to live on any longer.
Another potential issue is that once the settlement agreement is signed, you cannot change the terms of the structured settlement. Regardless of your financial needs, you will have to abide by the rules of the settlement.
Before making your decision, talk to your attorney, like Spesia & Ayers Attorneys At Law , about additional pros and cons of choosing a structured settlement.