Although a lump sum payment is preferred most of the time during an injury, there are exceptions where a structured payment should be accepted. A lump sum payment is when the defendant or his/her insurance company makes one payment to the injured. But there are instances where the plaintiff prefers to opt for a structured payment.
A structured settlement is where the payment is paid in installments spread over an agreed period of time. In fact, the first part of the settlement will be immediately paid to the victim and his/her lawyer and the rest would be structured over a certain period of time. This read offers information on when should you accept a structured settlement.
Everything about a structured settlement could be negotiated between the defendant and plaintiff. The length of the structure, how much money should you receive in each payment, whether the payment should continue to your heirs once you are gone, and whether you prefer a lump sum payment at the end should be negotiated between the plaintiff and the defendant or his/her insurance provider.
There are many advantages of a structured settlement. In fact, you should accept a lump sum settlement for small and medium-sized settlements such as settlements less than $150,000. But if you are in the process of settling a large case, there are good reasons to go for a structured settlement.
The most important benefit is a structured settlement guarantees that you wouldn’t spend the money too fast as with a lump sum payment. There have been numerous instances where the plaintiffs blow through the money they receive within a short period of time which is the main disadvantage of a lump sum payment.
Also, a structured settlement will save you money on taxes. Although the money received in a personal injury claim is not taxable, you have to pay taxes on the dividends and interests received after investing such money. When it comes to a structured settlement, you have less money in your account at any given time which would result in a much lower tax obligation. These are some of the major benefits of going for a structured settlement instead of a lump sum payment when you are experiencing a personal injury settlement case.
The right personal injury lawyer is important to negotiate with the defendant or his/her insurance provider when accepting a personal injury claim. An experienced lawyer knows how to deal with insurance providers to obtain the maximum benefits for his/her clients. If not, the insurance provider will come out with numerous arguments to reduce the amount of payment to the plaintiff.
That’s why you need to work with a reputable and experienced personal injury lawyer in the area when you are injured due to an auto accident. It helps you get the most out of the settlement.
The aforementioned post offers information on what you need to consider when deciding between a lump sum payment and a structured settlement when you are injured due to an auto accident.