A structured settlement is a regular stream of payments granted to the plaintiff in a civil lawsuit. Structured settlements guarantee lifetime income for the injured party.

How Do They Work?

Structured settlements are a common way that cases are settled, in which a a series of periodic payments are set up with and insurance company instead of in one lump sum, related particularly to:

• Personal Injury– The plaintiff suffers an injury caused by the defendant’s action.
• Medical Malpractice– When treatment received is below standard and leads to injury.
• Wrongful Death– Awarded to the family of the deceased when another party is found liable.
  The amount of each payment and the length of time over which it will be paid out will be determined by several parties:
• Plaintiff: the person who was wronged and is seeking compensation
• Defendant: the person or company who is accused of doing wrong
• Qualified assignee: a company that, in some instances, assumes the defendant’s payment responsibilities and has experience working with civil cases and structured settlement payouts
  Insurance company: the company who will pay out the settlement to the plaintiff

What Is the Process for Being Awarded a Structured Settlement?

1. Terms of the settlement are decided.

Once determined that compensation is owed to the plaintiff, the exact terms must be decided upon. The way that a structured settlement works does not change but the lawsuit payout options can vary widely. Current and future needs will be considered by the plaintiff. For example, there could be a larger initial payment and smaller payments afterward. It could be paid out over several years, or for the rest of the person’s life. Once the parties agree to the terms, the defendant will give the money to the qualified assignee to purchase the annuity.

2. Annuity is purchased from an insurance company.

Annuity is set sup by the qualified assignee to match the terms which were agreed upon. Once these terms for how the payments will be distributed are set, they cannot be changed, regardless of how the plaintiff’s needs may change in the future. These payments are set up with the best intentions of the plaintiff in mind. However, over time, the plaintiff’s needs and financial situation may change, leading him or her to seek out a lump sum payment.

3. Plaintiff begins receiving payments from the settlement.

The plaintiff will receive the payments from the insurance company, at the designated time, as specified in the contract.