If you own the rights to structured settlement payments, you have several options open to you that you may or may not choose to exercise. Knowing what those basic options are is the first step in determining whether your current arrangement is the best for you.

How Do I Know If I Hold Rights To A Structured Settlement?

Most people know if they hold the rights to a structured settlement, but since the definition can be somewhat broad, you may be unsure.

Basically a structured settlement agreement is a financial contract wherein a responsible party is committed to paying you in regular intervals to satisfy a financial obligation to you. Most commonly these are the result of a personal injury lawsuit where the person responsible for injury, damage, and/or negligence is required to compensate you for your pain and suffering and sometimes loss of property or use of it. The cases that result in structured settlement payments can vary and may include

oPhysical injury

oPsychological harm

oMedical malpractice

oWrongful death

oProperty loss or damage

Structured settlements also derive from contests and winnings. Sometimes a lottery winning, gambling or casino win, or other similar large windfall may be structured as a recurring payment made over time rather than a singular large payment.

Awards that are formed into structured settlement agreements are usually quite large and so are paid out over time at a rate that is supposed to meet the needs of the recipient, while also compensating for damage done.

Where Structured Settlement Payments Come From

Because such large payments would be hard to meet for some payers, and also because the majority of such payments come from an insured party's insurance provider, an annuity is usually purchased to cover them. This annuity is an investment bought for less than the actual amount owed, and accrues interest. A combination of interest and principal is used to make the recurring structured settlement payments, and this is the money received by the person receiving monies.

What Are My Options With My Structured Settlement?

If you do determine that you hold rights to payments, you have the option to sell those rights to a third party if it is deemed in your best interest; by doing so you can receive a large lump sum of cash at a discounted rate in exchange for a specified number of the payments. There are many ways this can be done, and you can choose to sell all or just some, or a percentage of your structured settlement payments. This is usually done to satisfy a financial need, such as to pay for unforeseen expenses, recover from financial stress endured during the settlement phase, or to access cash more quickly and gain better control over a larger sum rather than wait out accumulating payments.

Structured settlement payments do not arise out of fortunate circumstances in the vast majority of cases, although sometimes in the case of winnings they do. The agreements that are reached are not always ideal for recipients. Knowing what you hold rights to and exercising your payment and selling options is one way to recover from a bad situation, or possibly a way to make even better on a good one.