When the defendant or the defendant’s insurance company makes a single payment at one time which is considered final settlement in the case, it is called the lump sum payment settlement. Majorly, the supplements made in personal injury cases are lump sum payments.
But some plaintiffs prefer to have their compensation paid out in a structured settlement i.e. a part or all of the settlement amount is paid to the plaintiff over a period of years. A certain amount is paid in lump sum to the plaintiff and their lawyer immediately while the remaining sum is paid structurally over a period of years which can even be lifetime payments.
Structured settlements come with a bit of risk. When the plaintiff and defendant agree on a structured settlement, then the defendant (or the defendant’s insurance company) transfers part of the settlement to a different insurer. These different insurers are most of the time an insurance company that specializes in handling structured settlements.
Researching the company is necessary before signing any agreement as the money is paid out over the years and only a high rated company will not fail to make payments or declare themselves to be bankrupt. If the company fails or declares bankruptcy the structured settlement fails thus there is a slight amount of risk in a structured settlement.
Remember everything (almost) about a structured settlement can be negotiated including what the length of the structure will be, how often the money can be received (once a year, twice a year, monthly, etc.), how much each payment will be, whether a lump sum payment has to be made at the end and whether the payments should be made within the lifetime of the person or they want it to continue to their heirs.
