A structured settlement company is an organization which assists individuals who have been seriously injured. They work with both claimants and defendants to negotiate compensation plans for the injured party.
Most structured settlement companies employ consultants who have specialized backgrounds. Staff members consist of individuals well-versed in Worker's Compensation, medical malpractice, law, finance, casualty claims and commercial liability.
Instead of paying lump sum cash payments, structured settlements provide consistent income
over time. Typically, an individual must incur losses of $10,000 or more to qualify for a structured settlement. However, if the case involves minor children, losses of $5,000 qualify.
In the early 1970s, the Internal Revenue Service implemented rulings regarding payments made to injured parties. The ruling allowed individuals to receive structured settlement payments free from federal taxation. Prior to the ruling injured parties were compensated with lump sum cash payments subject to taxation.
Structured settlements are usually funded by an annuity purchased from a life insurance company by the defendant. The most common annuities purchased are those that pay fixed amounts over a specific period of time. However, every structured settlement is unique and can be setup in whatever manner best suits the needs of the claimant.
For instance, if the claimant has to undergo medical procedures every six months, the structured settlement can be arranged to provide additional funds to cover associated costs. The claimant might receive $1000 for five months, $5000 the sixth month, $1000 for five more months and another $5000 payment.
A structured settlement company can assist the claimant in obtaining the funds he needs, when he needs them. A variety of consultants may work on the case to ensure the injured party is compensated for both current and future expenses. Additionally, the structured settlement company will manage the account portfolio and make financial investments.
Structured settlements offer many benefits. Using the services of a structured settlement company can ensure the claimant obtains those benefits. First and foremost, structured settlement companies can make certain both principal and interest income is tax-free. Well-established structured settlement companies have access to multiple life insurance companies which allows them to obtain the best annuity for the injured party.
Structured settlement consultants can design plans to match current and future financial needs. Provisions for inflation can be included. Payments can be structured on a weekly, bi-monthly, monthly or quarterly basis. They can be paid for a period of years or throughout the lifetime of the claimant.
Due to the vast array of options, it's wise to work with a structured settlement company. These experts can guide individuals through the maze of structured settlement options and ensure claimants obtain the best deal possible.