Structured Settlement Faqs

Written by Jacey Harmon
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Settling a claim with an insurance company can take a long time and may be a very stressful period in one's life. Oftentimes the process can involve drawn out lawsuits and many visits with attorneys. By the end, it is understandable how a person would want the whole process over with. Since a structured settlement is basically a binding contract, there are some questions that should be answered before accepting a settlement. It is important to consult with a lawyer as well as a financial advisor before agreeing to a structured settlement.

Structured Settlement FAQs

What exactly is a structured settlement? A structured settlement is a way that insurance companies settle claims, such as personal injury or wrongful death claims. The insurance company purchases a single premium annuity that will guarantee a payment stream to the claimant. These payments can last for a period of months to years, depending on the size of the settlement. In exchange for providing the annuity and payments, the insurance company is released of all liability from the claim.

If I change my mind, is it legal to sell my structured settlement? Yes. Actually one does not "sell" the structured settlement annuity. The annuity is owned by the insurance company and the claimant has no rights to sell it. Instead, a claimant has the right to assign payments to whomever he chooses for whatever reason. In some cases, a court order is necessary to assign the payments to a different person or entity.

Can I sell a portion of my settlement or do I need to sell it all? You can sell just a portion of your settlement if you choose to. There is no need to sell the entire payment stream unless you so desire. Oftentimes a person may just need enough cash so that selling a portion of the settlement is the right way to go. Often, you can sell just a portion of one payment. Businesses that buy structured settlement payments are often very flexible in their purchasing plans.


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