What You Need to Know About Structured Settlements

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Did you know that consumers are unable to sue most of the largest companies in the United States due to fine print they put in their contracts? How unfair is that? Maybe you should read those terms and conditions before clicking "Accept".

This means when you have been wronged by someone, especially a business, you could still try to sue if you can to at least get the compensation you deserve. One of the most common outcomes of these lawsuits is structured settlements. 

Here's everything you need to know about structured settlements and potential payouts from lawsuits. 

What Is a Structured Settlement? 

A structured settlement is when an individual or group of people, like any organization, harms another and they both agree to settle a claim. An amount gets negotiated so that the plaintiff drops the lawsuit. Instead of receiving a lump sum payment, the harmed gets paid periodically through an annuity. 

Structured Settlement Process 

Structured settlement companies aim to give out payments to the wrong one. However, before the payment process can begin, a consultant and the life insurance company should get spoken to. The process goes as follows: 

The Plaintiff Sues 

Structured settlements are not given out unless the injured seeks compensation first. The defendant usually agrees to provide money to the plaintiff through structured settlements to avoid going to trial. A case that goes to trial may still favor the plaintiff. This means the defendant must provide a settlement anyway. 

The Parties Work With a Qualified Assignee 

A qualified assignee will work with the plaintiff and defendant to consider the terms of the settlement. They basically act as a structured settlement calculator. Along with deciding how much the payments will be, they can also agree on how long the payments will be given. 

It's possible that the payouts won't always be equal. For example, a qualified assignee might say larger payments are required at certain points. Once this information gets situated, the qualified assignee will take the defendant's money to buy an annuity. 

An Annuity Gets Purchased 

When an annuity gets purchased, a contract is set up to match the needs both parties agreed on. The terms of the annuity are permanent and cannot get edited once the annuity is set. Some take out an immediate lump sum to pay for the lawyer fees. 

The Structured Settlement Gets Paid 

The last step of the process is for the structured settlement to get paid to the plaintiff. Over time, a series of payments get made in correlation to the contract. 

Structured settlements provide better financial security down the line. An annuity can earn interest to protect the value. It is impossible to receive money from the settlement before the pay date unless the plaintiff sells their settlement. 

If you choose to sell, you can now search for reviews of the companies that make an offer. Be wary of sites that try to offer a structured settlement loan. You cannot get a loan from having a structured settlement. 

Structured Settlements Explained 

If you were wronged by an individual or company, your best bet is to try to settle with structured settlements. These settlements provide stability for the future and can gain interest over time. Use this guide to know how to get through the structured settlements process. 

Come back for more articles on personal financing options you may not know about when you get harmed and need to file a lawsuit. Visit the Insurance, Loans, and Law sections of the Bootstrap Business Blog to learn more about structured settlements and payment schedules.

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