What Are The Most Common Examples Of Structured Settlements?

Structured settlements are fast becoming better known and more popular around the world. This is true both about settlements that are structured from start to finish and ones that may involve a reduction in payments towards the end of a settlement, in addition to those involving the paying of a lump sum prior to structured payments then being subsequently made.

Why Have Structured Settlements Emerged?

There are many reasons behind the rise in popularity of structured settlements. One of the biggest is that it is widely accepted that people, in general, don’t do a very good job of managing personal finances. As a result, whenever a person wins or is awarded a financial payment, it is seen as more sensible to stagger payments over a period of time, so that a person enjoys the biggest possible range of benefits, rather than being awarded a large sum of money and blowing it quickly, for example, on extravagant purchases.

Selling a Structured Settlement

Despite the sensible reasoning behind the rise of structured settlements, many people who are awarded them aren’t happy about it. As a result, they choose to sell their structured settlement. This means they receive a lump sum and then defer their payments to the person or company who was happy to give them the largest one off payment.

Despite being a controversial practice, it is deemed a low risk financial strategy by those who purchase the annuity. Those looking to sell a structured settlement can get cash for annuity at structuredsettlement-quotes.com and from various other providers, both online and offline.

What are the most common structured settlements we see?

Divorce Settlements

A divorce is a common example of a structured settlement that might involve on-going payments as well as the awarding of a lump sum. These types of structured settlement often change, especially if on-going maintenance is required to be paid in respect of children, and the fact that these figures might change depending on the age of the children involved.

Divorce structured settlements can also be based on percentage income rather than a fixed figure, which means divorce annuity is often difficult to sell on, given that it can pose legal problems should there be any challenges to it later.

Lottery Wins

We’ve seen numerous stories in recent years of people around the world who have won mind-blowing sums of money only that should have set them up for life, only for them to blow it and be back at square one mere months or years down the line.

As a result, several jurisdictions now pay out lottery winnings as a structured settlement, while the option of structured payments or a lump sum is often a choice given to lottery winners who might want one or the other.

Personal Injury Payouts

These payouts are increasingly in the form of structured settlements so that those paying out aren’t liable for huge lump sums, while also ensuring that some cases can be reviewed and payments ceased if they are no longer applicable. Fraudulent personal injury claims have pushed the whole industry into using structured settlements, although many people making genuine claims favour them anyway.

Robert is a finance student interested in the workings of structured settlements as well as the reasons that motivate people to buy structured settlement agreements.

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