How Personal Injury Settlement Is Paid Out
If you or a loved one has suffered an injury due to another person’s negligence, it is only right to seek legal protection and redress. Personal injury cases are civil cases that offer monetary compensation for the damages suffered by the victim. Whether you hire personal injury lawyers for your case or not, the goal is to get a settlement that will make you whole.
Once you have agreed on a settlement amount, the next concern is how the money gets to you. There are different ways by which monetary compensation can be paid to the accident victim. Some may be in the form of a single lump sum or as a series of smaller payments. The smaller payments, also known as structured settlement annuities, can be designed to meet the specific needs of the accident victim. According to top car accident lawyers, once a settlement term has been agreed upon, it cannot be altered.
When going into a settlement negotiation, you must consider the possibility of a fair offer and how you would want the payment to be made. Below are some of the key factors that can influence your decision regarding your settlement payout.
Considerations For Choosing Lump Sum Settlement
After a favorable monetary compensation has been agreed upon, you may be presented with the chance to collect all your money in one single payment. While this may sound tempting, there are important factors that you must consider. Whatever type of payment you agree to will affect your financial life.
Advantages of Lump Sum Payouts
The biggest advantage of getting your compensation amount in one payment is liquidity. With a lump-sum payment, you can decide how you wish to spend or invest the amount to yield regular returns. Remember that your settlement is tax-free. However, if invested, returns will be taxed.
Structured Settlement Payment
The other option available aside from a lump sum settlement is structured payments. Although you won’t have all of your money at once, you can work with a structured settlement expert who will structure the payment to meet your present and future needs.
When deciding between these two settlement payout options, you must consider your money m level of financial discipline, investment knowledge, and future financial goals. If you have a bad record of handling your finances, a structured payment offers the protection of long-term, regular payments.
Start and End Dates for Structured Settlement Payments
Depending on your financial needs, you may decide to begin the payout instantly or hold off until later. Delaying payment gives you the advantage of an extended accumulation period. The more you wait, the more valuable your payout will be.
It is important to pay attention to the contract terms. A life-only annuity contract will pay out a regular settlement for life, while a time-bound annuity will payout for an agreed time frame. As part of your structured settlement payment contract, you can also negotiate the distribution amounts, the payment frequency, as well as death benefits.