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Should I consider a structured settlement to resolve my claim?

When some people hear about settlements for personal injury cases, they automatically assume that they will receive the money all at once. That isn't always the case. Some personal injury cases are settled out of court before the case goes to trial. Some of those cases are settled through a structured settlement. Understanding some basic points about structured settlements might help you decide if this is an option you would consider.

What is a structured settlement?

A structured settlement is one in which the plaintiff receives payments at regular intervals over a specified amount of time. The structured settlement is usually handled through an annuity. The defendant, usually through his or her insurer, would place a specified amount of money in the annuity. Those funds are then distributed according to the settlement agreement.

What are the pros of this type of settlement?

These types of settlements are often faster and less expensive than having to go through a full-blown trial. It is possible for a structured settlement to be combined with a lump sum payment so that the plaintiff can pay for the immediate needs related to the accident. Structured settlements are fairly flexible so that both sides can come to an agreement about how to settle the case. There are also tax breaks associated with a structured settlement that you don't have if you receive a lump sum payment.

The contract that comes with a structured settlement can be rather complex. It is vital to fully understand all the terms of the structured settlement offer so that you can make an informed decision about how to proceed.

Source: FindLaw, "Structured Settlements: Pros and Cons," accessed Sep. 03, 2015

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