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Structured
Settlements Information :
Structured Settlement - Guaranteed
Income for those with Disabilities
by Charles Essmeier
Up until twenty years ago, anyone who won a lawsuit as a result
of a claim involving worker's compensation, wrongful death
or accident had to accept a lump sum payment as their compensation.
The payment would be intended to be invested, with the beneficiary
living off of the proceeds for as long as their recovery was
expected to take. In many cases, this type of settlement works
fine, but in other cases, the results are a disaster.
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Also
read:
• Florida Viatical Settlements
• Lump
Payment or Structured?
A structured settlement involves a financial or insurance
arrangement which includes a periodic stream of payments,
that a claimant or plaintiff accepts in order to resolve
a personal injury claim or other legal case.
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It
is difficult enough for someone who has been through the trauma
of an accident or illness to have to adjust to a new lifestyle
without having to also become an expert in the art of financial
investing. If you have been active all of your life and you
suddenly find yourself in a wheelchair and having to handle
assets of several hundred thousand dollars or more, you could
be overwhelmed. You could hire someone to handle the investments
for you as well as the tax issues, but what if the person
you hired wasn't trustworthy? What if you hired a greedy relative
who took all of the money? What if you hired someone incompetent?
These problems, and statistics that show that people who receive
large sums as compensation for accident, injury, or wrongful
death often spend all of their money in a short period of
time, led to Congressional action in 1982 that amended the
Federal tax code to allow for structured settlements. A structured
settlement is simply an agreement between the responsible
party and the injured party that the payments will be made
over time, rather than in a lump sum. The two parties reach
an agreement, the party responsible for payment purchases
an annuity, usually through an insurance company, and the
injured party will receive steady income over a period of
years or even a lifetime.
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Also
read:
• Premium
Financing Hedge Uncertainty
Affluent insureds can use leverage to buy life insurance
using recourse and nonrecourse premium financing. After
two years, the coverage may be sold as a Senior Life
Settlement, or retained.
•
Presettlement
Funding Could Help Injury Victims
It
is a new service that can help injured parties while
in litigation. This service can provide cash to injury
victims for living expenses or to complete the lawsuit,
and is non-recourse.
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The
payments are adjusted for inflation; the sum of all of the
payments will be greater than if the amount had been paid
as a lump sum. Because the payments are purchased up front
as an annuity, the paying party actually pays less than the
sum of the payments, as well. The result is generally a win-win
situation, with the injured party receiving a steady stream
of income over as long a period of time as necessary, while
the paying party does not have to worry about making monthly
or annual payments.
While a structured settlement is not the ideal payment arrangement
in all situations where a long term injury settlement occurs,
it does work well in many cases where a lump sum payout might
be undesirable.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier
is the owner of Retro Marketing, a firm devoted to informational
Websites, including http://www.StructuredSettlementHelp.com/
and http://www.HomeEquityHelp.net/
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