Structured Settlement Process Made Easy

Although most people focus on the result of a structured settlement process which is a cash payout or settlement money, the process to arrive at this point can be quite extensive.  Most settlements begin when someone is seriously injured or loses a loved one due to the negligence and fault of someone else. This may be an individual person who has done something reckless or a company that has left unsafe conditions which resulted in a worker or customer being injured or killed.  

After a serious injury has been inflicted, the medical bills will follow quickly for the injured person and they will seek a lawyer to have these expenses covered. In the instance of a death, the immediate family of the deceased will need money to pay for funeral arrangements. There is no amount of money that can take away the pain of losing a loved one or erase permanent bodily injuries or disfigurements, but cash money is the only thing that can be awarded to somehow compensate for the fault of the other party.  These cash payments can take the form of out of a court settlement or damages awarded by the court. 

Interestingly, this money can also pay for burials and medical bills that pile up, whether the injured party dies or not, so the result is a personal-injury case in court when a settlement agreement is not reached.  When a judgment is placed on the guilty party, a large, lump sum of money is normally not awarded. Instead, the structured-settlement process will continue with an agreed-upon settlement to be paid in smaller amounts over a given period of time.

Often, the person actually paying the structured settlement is an insurance company and there may be an agreement reached outside of court. This usually happens when it is obvious the injury was due to negligence and the company would lose more money trying to fight it then settling quickly.

A structured settlement will award a fair amount of money to the injured party or the family of a deceased party, but the money will be paid out every month or year, on an agreed-upon schedule. In order to do this without taking a huge loss in profits, an insurance company will take out an annuity with a life insurance company and have that pay out directly to the injured party. The money is earned as it is paid out, so there is no big hit to the insurance company as with a lump sum payment.

While this arrangement may work out quite nicely for an insurance company who has to pay claims on a regular basis, it isn’t always the best bet for an injured person who has to pay the bills while recovering from the injury and is faced with a mounting collection of medical bills. Many injured parties continue to struggle financially even though a large sum of money is due to them, unless they decide to cash in the settlement.

With the growing number of lawsuits every year, the business of "buying out" a structured settlement is booming. There are more companies offering these services than ever before, making it easier for those injured to turn their long-term settlement arrangements into something more favorable for their current financial needs.