General — 26 March 2013
Should I Accept a Structured Personal Injury Settlement?

A structured settlement is arrangement set-up between the plaintiff and the defendant or the defendant’s insurance company. At this point of your personal injury claim you have finished the initial round of treatment your attorney has found for you. This treatment was most likely done on a personal injury lien by a lien doctor, like those listed on the directory  Personal injury attorneys utilize this directory of physicians working on a lien to best serve their client in the most economic fashion. When contemplating a structured settlement there are some inherent benefits to accepting a structured settlement but there are also some disadvantages of choosing this method of compensation. Here are some of the benefits:

  • You can receive a tax break if you as the plaintiff doesn’t have control of the annuity
  • Prevents the awarded party from spending all the money in a windfall
  • An annuity is handled by a professional broker who can earn money for the annuity over the life of the annuity
  • An annuity can be combined with lump sum payments to cover planned medical bills
  • Provide closure to intense settlement negotiations

Here are a few of the disadvantages:

  • You may lose the tax credit if you retain too much control of the annuity
  • Unexpected changes in the economy may affect the annuity payments
  • The annuity may end up with a broker who isn’t protected against insolvency (the lack of financial resources)

With all these facts considered, it is recommended that you choose the structured settlement approach. The main detraction of a structured settlement with most people is the attraction of the lump sum. Because structured settlements can be tailored to fit an individual’s needs, you can have larger portions be setup in the payment cycle if you want to receive a “lump sum” type amount and still receive monthly installments. This approach will help cover your medical costs which may be needed for the rest of your life or life of the settlement. Talking through this decision with your personal injury attorney is very important. These attorneys have guided you through the process of finding a doctor on lien who treated your initial injuries. They will like to see you get the best settlement possible that will keep you on the path to a healthy lifestyle.

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