Such settlement technique is first introduced in Canada in the 1970s. The idea was so amazing and it quickly grabbed its position in United States and turned popular in Europe countries finally.Structured settlements refer to compensation payments by periodic allowance system. Usually, such annuity payments established to reimburse the settlement recipients losses of income or working ability in long term.

Wednesday, 6 May 2009

Buy structured settlements

Structured settlements offer several advantages that make them a popular choice with individuals. The foremost benefit of a structured settlement is that it provides currency at regular intervals and the currency is free of state as well as federal taxes. As against this, the interest accrued from investments made from currency obtained through a lump sum is subject to federal and state tax. Also, often individuals who come in to currency by acquiring a lump sum are unable to invest it wisely and often spend it wastefully, this isn't possible with a structured settlement where small amounts are made available periodically and therefore a person's spending is regulated.
Loss of money that has been acquired through an installment of a structured settlement is not as severe as loss of money acquired through a lump sum payment. The small amounts are easy to manage and also do not excite the interest of unscrupulous elements as compared to hefty lump sum payments.

With a structured settlement, an individual does not need to worry about planning for long-term investments as the periodic payments can be structured to take adequate care of one's needs post retirement or in the case of a debilitating injury. Structured settlements are favored by both the defendant and the plaintiff as we can be settled without having to be going to court. This saves time and is often cheaper for the defendant who would otherwise have to pay more with an in-court settlement. The risks involved for both parties are reduced with a structured settlement as per which the defendant is contractually bound to pay the plaintiff. Also, attorney costs for a out-of-court negotiated structured settlement are lower than what we would be if a litigation were to be filed in court. Attorney fees can come down by as much as 8% to 10% for a structured settlement achieved out of court. This can mean a saving of thousands of dollars for the defendant as structured settlements can often run in to over a million dollars.

Structured settlements allow insurance companies to provide payment to claimants at a lower cost and the payment schedule can be set according to a claimant's convenience. A structured settlement can be used to provide for certain costs of an individual right from the stage when he is a minor. The money can be disbursed for college expenses or to meet the costs of higher education. Periodic lump sums made available to an injured person can be used to make medicinal purchases and sustain oneself.

Three reason for the popularity of structured settlements is that we can be availed in a variety of formats; these include lump sum payments made periodically when funds are required for medical expenses, education, or marriage; percentage increase annuities that offer annually increasing payments that help to counter inflation; deferred annuities that enable to defer the commencement of payment to a later date; period certain annuities that can be combined with a lump sum payment for receiving payment over a fixed period; and joint and survivor annuities in which payments are continued to the survivor annuitant if the primary annuitant passes away.

Monday, 4 May 2009

Making a structured settlement claims

The completion of a structured settlement requires contracted agreement from six major parties: the settlement insurer and the settlement claimant. The insurer can be an insurance company, a qualified settlement fund trustee, or even an individual defendant (in rare case).

In the beginning of a claiming technique, the insurer have to promises to pay future periodic payments to the claimant with all or a portion of the negotiated personal injury damages in exchange for a release by a contractual agreement.

To finalized, the insurer will need to make an assignment of its obligation to pay future periodic payments to a third-party. The assignee assumes this obligation. The plaintiff agrees to the assignment in the release and agrees to look to the assignee as the obligor for the promised future periodic payments.

If the offer is agreed by the claimant, he or he will release the claim in exchange for the promise by the insurer by signing off the contractual agreement. The settlement can consists of one or more future benefit payments to claimant in addition to immediate cash items (for attorney fees, liens).

The assignee receives funds from the Defendant/Insurer or QSF Trustee and uses these funds to purchase an annuity contract in an amount sufficient to fund the periodic payment obligation it's assumed. The assignee owns the annuity contract and may either make payments directly to the Plaintiff/Claimant or may direct that the annuity issuer make the payments.

Advantages with structured settlement

Picture an 18 years elderly with a huge pile of money from lump sum settlement, the risks of overspend or being conned is high. Now imagine the same person gets a fix smaller periodic amount from structured settlement, the risk of being targeted by con man is maximum. So is the chance of wasting the money recklessly.

Structured settlement in general comes with a few advantages that conventional lump sum money settlements do not give. A few major plus points include the elimination of dissipation risks involve with lump sum money settlement and tax exemption on the settlement income.

In United States, favorable tax treatment rules have been extended to the money received under annuity payment agreement in order to encourage the use of structured settlement system. For instant, money income from structured settlement payment are not included in gross income when filing tax, this means that the payment from structured settlement is non-taxable.