There are several benefits of a structured settlement.
The first benefit is that the plaintiff will be able to receive a lot of substantial tax benefits. This is because any type of settlement from a personal injury claim is considered to be tax free. But you need to be aware of some of the exceptions that could apply to the case because there are some individual portions that makes the settlement that was agreed upon taxable. The best example of this is if the punitive damages are received or if the income accrues some interest, then they will be taxable.
The second benefit is that the plaintiffs will be able to get a certain amount of payments over time. But if the case involves minors, then it might be a good idea to get a lump sump payments. This is because it allows for the person to do some long term investing. This means that the money will be able to pay for the big ticket items like a first home or a college education. If the person is suffering from a injury that is debilitating, then you will have a lot of medical expenses in the future, so getting the money upfront will help you to invest to make sure that you will be getting a greater return. Therefore, the plaintiff will have a healthier situation with their finances.
The third benefit is that all of the annuities will be protected by insurance laws based on the state that you live in. This helps to guarantee that the coverage and all of the obligations of the insurer. Based on the federal laws, the insurer will not be allowed to declare bankruptcy because most states will have a safety net for all of the insurance companies. This means that the policy claims and insurance companies will always be covered and paid for by the guaranty associate of their home state.
The fourth benefit is that there is a combination given at the time of the settlement. This combination is a structured settlement and a lump sum payment. The main reason for this is so that the plaintiff will be able to pay any of their larger bills like a medical bill. The person will also be able to pay for their rehabilitation and repay some of the debts that accrued when the injury happened to them. Plus they will have the payments that they will continue to get for the rest of their living expenses.
The fifth benefit is that the structured settlement is something that you will be able to use when you are trying to negotiate a settlement. You will need this if the cases where the negotiations are not going the way that you expected them to go. This could also be the case if both sides of the case are far apart in what they are offering. This means that both of the parties will be able to reach an agreement that is acceptable.