Structured settlement is a financial transaction arrangement of insurance companies in settling claims and lottery agencies in disbursing the prize amount. In this, the amount is paid as regular installments and not as a lump sum. If the required procedures are kept, then this installment amount will not be taxable. Suppose you want to get the total amount of the claim after some time. Then you can do that by approaching companies that purchase these settlements. If you want to sell structured settlement you must know that you will not get the actual value of the remaining claim amount. You can get the value of your settlement by filling the forms here.
The Past And The Present Of Structured Settlements
Structured settlement has a short history. It is an insurance phenomenon that had not been in vogue until the 1980s. It was in 1982 that the Senate of the USA passed the Periodic Payment Settlement Act. The rationale of the lawmakers was that it would make people financially secure. A study had found that a majority of people misspent the lump sum they receive as insurance claim. So getting a fixed, regular income from the insurance company, much like getting salary or pension makes people financially comfortable and stable.
The most common cause of structured settlement is motor accidents. The person who suffered bodily damages can file for compensatory financial aid. This can result in a long and costly legal battle. Structured settlement is an out of the court settlement — legally binding nevertheless — in which the insurance company agrees to pay a mutually agreed up on amount to the sufferer in regular installments. The period of payment and the amount of installment should be fixed and incorporated into the agreement. For getting tax benefit for the amount, the terms of the agreement should not be breached. In an ideal scenario, this provides a win-win situation for both the insurance companies and the clients.
The law regarding structured settlements varies across the states of USA. In all, 36 states have legislation about this. The laws of some states require that the client should get the help of an attorney before going for the settlement. After signing the agreement, it cannot be revoked. So, after some time if you want to get the entire amount as a lump sum, the only option you have is selling structured settlement. There are several companies out there who will purchase the settlement. Feel free to fill the forms here, if you want to get the exact value of your settlement.
