Settlements Structure

What is a settlements structure?
Settlements structure is often misinterpreted for the term Structured Settlement.

What is a structured settlement?
A structured settlement is a cash settlement provided to an injured party. The parties to the settlement agree that the settlement amount will be paid over time rather than a single immediate lump sum payment. The structured settlement is set up to ensure that the injured party will have the funds necessary to meet future needs, and will rely on these payments to meet their financial requirements. Rather than receive the cash up front, the money is normally put into an annuity that will pay the recipient regular payments over time. This is a way to ensure the injured party will have the money they need for years to come.

What is a lump sum?

A single one time payment.

Why would someone want to sell a structured settlement?
While the parties to a structured settlement attempt to match the payment schedule to the future needs of the injured party, life circumstances can change after settlement and a settlement recipient may need access to need a sum of cash. Divorce or marriage, kids or mounting medical bills are typical reasons why people may need a sum of money. In these cases, the settlement recipient can sell some or all of their future payments for a lump sum cash payout to meet their immediate need for cash.

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