Structured Settlements Authority

How to Get Cash for a Structured Settlement

Beware of Structured Settlement Abuses

While normally a safe practice, there are several areas of potential exploitation and structured settlement abuse that an injury victim or plaintiff should be aware of when entering into a structured settlement payment agreement.

In establishing a structured settlement the plaintiff relies heavily on his or her attorney in establishing the agreement and negotiating on their behalf with the defendant and their attorney. It is important that you understand any financial relationship between your attorney and the financial services firm or proposal he is recommending. It is not appropriate for your lawyer to receive commissions, fees, or to purchase the settlement without full upfront disclosure to you in advance. You would not want the person whom you are relying on for advice to be influenced by commissions or financial incentives from outside parties.

It is important that the plaintiff understand be able to compare the actual value of a cash settlement to the discounted present value of a structured settlement. At first the structured settlement may seem significantly larger, but on a discounted present value basis the future payment annuity may actually be less than a cash lump sum settlement. Be sure you understand if the defendant will receive any rebates or commissions from the structured settlement insurance company. It is also wise to compare charges and fees for establishing the settlement by various companies.

Insurance companies are the ones who normally administer annuities such as structured settlement payments. These specialty financial products are highly profitable since they are very specialized in nature. The plaintiff must be aware and guard against excessive commissions, which would be taken out of their settlement. As a consumer it is always wise to shop around because you do not want excessive fees or commissions to diminish the value of your structured settlement agreements.

A final consideration that must be taken into account is the harsh reality that the life expectancy of a personal injury victim has often been diminished by their injuries. Structured settlement companies know this and factor this into their calculations but the plaintiff might now have thought about this. Since an annuity can be structured any way you choose, you may want to weigh the alternatives of having a payment that terminates upon the beneficiaries death vs. having a fixed number of payments that could be transferred to the plaintiffs estate in the event of a premature death. This is a decision for the plaintiff and their family to make.

Legal Aspects of Getting Cash for a Structured Settlement