Options For Structured Settlements

Written by Jacey Harmon
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Your options with structured settlements are somewhat limited as they are, well, structured. A structured settlement is usually used by an insurance company to settle a claim. The settlement is designed with very specific definitions that do not change over the time of the settlement period. Basically, once settlement terms are agreed upon, they cannot be changed at a later date.

When negotiating a structured settlement, the first thing that is agreed upon is the settlement amount. Insurance companies will offer a lump sum or structured settlement that extends over a period of payments. The extended payments will often total more than the lump sum to entice an individual to take the structured option. Once the amount is agreed upon, the terms of the settlement are then hashed out. How much, how long, and when payments are going to be received are the final details that are worked out.

Once a settlement is reached, you are pretty much locked into the terms of the agreement. This makes deciding to take the structured settlement a very important decision, as it will have lasting effects. Consulting with a financial advisor and talking things over with your family may reduce the difficulty in reaching a decision. Once you have agreed upon the terms of the settlement, you can do whatever you want with the money.

Options for Settlement Payments

As noted above, the settlement is very strict and does not allow for any flexibility. However, you can assign your future payments to a third party in exchange for a present lump sum of money. You can assign your entire payment stream if you choose, or you can assign just a select number of future payments. One thing that you can consider is donating payments to a local or national charity. Similar to exchanging future payments for cash, you can donate all, some, or part of your payments to your favorite charity.


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