First we would like to understand in a layman’s language that what do we mean by structured settlement? In India this term seems to be uncommon due to lack of it’s awareness though it is much popular in United States. In case an individual get physical disability or major injury due to misconduct or negligence of any individual or a company provided that he wins a lawful suit in the court thereby approving the incident . The injured person is sanctioned a particular remuneration by the court payable by the responsible party. The compensation could either be paid at once or it may be paid a lum sum at once and rest to be paid party in installment , this payment arrangement system is called a structured settlement.In India this system was enforced by the Congress Govt. considering the benefit of the claimant.In order to encourage the policy the govt. has exempted all taxes arising on the payment received as structured settlement. Thereby making this income as tax free. The Govt. wanted to promote this system because when a person get injured and if he receives the remuneration at once he is unable to manage the same and it is found that in maximum case the amount gets over due to high risk investment or personal loans thereby making the claimant dependent and helpless. In Structured settlement the person gets the particular settled amount every month for long span of time and he gets assured monthly income thereby giving a assured monthly support and protecting against any kind of helplessness.In general case life long structured settlement a minimum guarantee period is stated thereby assuring that even if the person expires before the minimum guarantee period the installment will be continued thereafter in the name of the appointed nominee.This system of structured settlement is to be asked at the time of the settlement at initial stages, once the agreement is formed and spot payment is agreed upon then the claimant can’t ask for any sort of structured settlement.Structured settlement money is allotted and approved at the time of agreement between both the parties. Thereafter both the parties are legally bound to abide by all the terms settled.
STRUCTURED SETTLEMENT COMPANIES
In order to protect the interest of the injured the structured settlement payment guarantee is to be provided so that he would be assured to get uninterrupted and regular payments.The company with a sound backup are authorize as structured settlement companies who will make payment to claimant on regular basis. Structured settlement companies are reliable and proper service could be expected without any sort of problem in future.
SELL STRUCTURED SETTLEMENTS.
In case you have opted for structured settlement considering the benefits as discussed above but as we know that future is always uncertain so in case in future u feel like getting a lump sum money against your secured settlement money and wanted to quit you have the option to sell structured settlements. One may need cash for settlement due to several reason like to purchase a house, payment for major hospital expense to be met for any other family member or thyself etc the reason may be friendly (for self convenience when he is no more dependent on the installment) or forcefully (which he is bound to take due to practical unavoidable reason). Though this agreement could not be breached in between but it’s legal right could be transferred to any third party with his consent or authority.If any claimant is interested to sell structured settlements there are various competitive offers available in the market. Whether it is a question to sell structured insurance settlement or a general structured settlement one may opt for the most suited offer to avail the maximum amount.After you sell your structured settlement one may get cash for settlement immediately after transferring the legal rights of structured settlement to the buyer.Structured settlement funding companies are seeking the opportunity to buy structured settlements. So it could be considered as a profitable decision for both the buyer and as well as sellor.
BUY STRUCTURED SETTLEMENTS.
Now the question arise that why will a third party interested to buy a structured settlement. This is due to several reasons namely 1. To get the tax benefit (As said above the amount so received is exempted from tax)2. Structured settlement lump sum payment is made by the buyer for purchasing the structured settlement. In simple language the investor who pays the cash for settlement will definitely like to enjoy the benefit for the same , so they pay much less amount in comparison to the amount receivable under structured settlement.