8 Reasons Why You Should Opt For a Structured Settlement to Receive Your Injury Settlement Funds


Most injury lawsuits usually result in a settlement. Though you can receive settlement funds in lump sum, your settlement can also come structured, meaning you will receive an amount on a regular basis, stretched out over time.

This is a better arrangement especially if you have lost permanent ability to work, as it guarantees regular income. Depending on the amount of your settlement, you can receive payments for the rest of your life.

When you opt for a structured settlement, you will enter into an annuity contract with the defendant’s insurer. Before entering into such a contract, you should discuss all angles with your attorney. You should also weigh the below benefits to see if the plan is suitable for you.

Benefits of structured settlements

  1. Tax benefits

As your structured settlement will be like an annuity, your payments are exempt from taxes. This is a contrast to lump-sum settlements that the state treats as income and hence subjects them to taxes.

  1. Financial security

If you receive a lump sum settlement, you are likely to deplete the funds within a short time.

Structured settlements come to you much in the same way you receive your regular income. As a result, you will usually plan within that available income.

When you are dealing with small amounts of money, it’s easier to control your risks even if you decide to invest your finances, hence there is lesser threat of losing all your money.

  1. Professional help

Your settlement funds are in the hands of a professional who will assist with planning to ensure your funds cover all your expenses and that they last long enough.

The professional can even structure the payments to suit your most pressing needs.

  1. You are protected from insolvency of the financier

If the paying insurance company becomes insolvent, you will still receive your payments as most state laws guarantee payments to anyone owed by an insurance company.

  1. You can still pay any bills that have piled up

It is likely that hospital bills, debts and utility bills have accumulated during the course of settlement negotiations. You may also have used one of the best lawsuit funding companies to fund your settlement process.

On conclusion of the settlement, there is deduction of a lump sum amount from your settlement to pay for these immediate costs. You will receive the remaining amount in a structured way.

  1. You can benefit from future medical advancements

It is likely that your condition can find treatment in the future due to medical advancements. If your attorney negotiated for funds with this in mind, your structured payments can fund for such provisions.

  1. It’s faster to close negotiations

As the burden of the settlement spreads out over a prolonged time, it poses less of a financial strain on the defendant and for this reason; it’s easier for the defendant to accept such an arrangement as opposed to making one lump sum payment.

If you want financial security for life, you can talk to your attorney about getting a structured settlement.


About the author

Hart Mill is an injury attorney who has worked with lawsuit funding companies for 12 years. He shares his experience about injury settlements. Read on for more.

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