When an insurance company agrees to pay someone a settlement, they may offer to make payments periodically rather than in one lump sum. This is called a structured settlement, and it does sometimes occur in insurance claims and lawsuits. At first thought, you might expect a structured settlement to be a bit of a disadvantage to the payee, however there may be more benefits to structured settlements that meets the eye. On the other hand, there are also a few disadvantages, or what some would consider cons to structured settlements.
Continue reading to learn some of the pros and cons of insurance Company structured settlements, and where to get the best legal advice regarding your potential accident claim.
Potential ADVANTAGES of Structured Settlements
If you were to ask a group of individuals who have received a structured settlement in the past from an insurance company, they would likely tell you that the primary benefit they experienced was secure financial management. By receiving their settlement in increments rather than one lump sum, they were able to better control their spending and savings, and therefore, practice improved financial management.
Here are some additional prospective benefits to receiving a structured settlement:
In many cases, a structured settlement usually winds up paying out more money than a lump sum payment.
Structured settlements can also make financial planning, namely tax planning, a lot easier when compared to the process following a lump sum payout.
Due to the added annual income a structured settlement provides, recipients may be eligible for certain tax benefits and advantages.
Many recipients of structured settlements enjoy adding to their annual income as an alternative to receiving a bulk payment from an insurance company settlement.
By receiving a structured settlement in periodic payments, recipients can better control their spending and savings over time.
Potential DISADVANTAGES of Structured Settlements
When it comes to the possible disadvantages of structured settlements, there may be a few. In fact, if you were to ask the same group of individuals in the last example, they would likely have a few complaints as well. One of the main disadvantages discussed among structured settlement recipients and legal advisors is the fact that it can hold you back from taking advantage of certain investment opportunities, such as investing in stocks, bonds, real estate, business, schooling, and more.
Here are some other possible cons to accepting a structured settlement:
In some scenarios, a structured settlement can turn out to be less money than a lump sum payment after you consider commissions, fees, and inflation.
Many are opposed to structured settlements from insurance companies because they don’t like the idea that a financial institution has control of their settlement.
There are several legal regulations restricting how you can sell your structured settlement, if you ever choose to do so.
Trusted Legal Advice About Insurance Settlements for Indiana Injury Claims
Call The Law office of Craven, Hoover, and Blazek P.C. at 317-881-2700 to discuss your potential Indiana personal injury claim with a licensed accident attorney you can trust. Our law firm offers free initial consultations and never collects lawyer fees unless we recover a settlement or judgment for you. Get started on your path to financial and emotional recovery with a simple phone call to our Indianapolis accident injury lawyers, today. We represent clients throughout the State of Indiana.