Personal injury claims can be often drawn out and quite stressful. The cost of medical bills, perhaps ongoing ones as well as the general costs of living can be hard to manage. This is why most successful personal injury cases end in some form of settlement to the victim of the injury. A common misconception is that upon the ruling the victim will be awarded a lump sum of the agreed settlement figure. Not always the case.
What is more often the case with personal injury cases is the money is paid out to the victim by way of structured settlement investments. What this means is that you are paid your lump sum in installments over a predetermined period of time, possibly years. Because of the impact a personal injury can have on your lifestyle the idea is that the settlement can provide long term ongoing financial assistance. Historically many cases where lump sum payments were made the victim was unable to manage the settlement pay out in a way that provided long term assistance. Being in a difficult situation and being awarded a large amount of money can often be a recipe for insensible spending or poor planning.
Some people may be able to return to work after a period of time. This form of ongoing settlement payout may give them the opportunity to enter the workforce on a part time basis while receiving the financial subsidy. Those that may be unable to return to work still have some form of regular income. Obviously the amount of the settlement and the duration of the annuity will determine the amount and frequency the structured settlement is received.
A structured settlement investment is also able to be sold. Either a portion of the settlement or the entire settlement can be sold for a lump sum. This has its benefits and disadvantages for financial planning. While it could be tempting to sell it off early to receive a lump sum that is quickly spent, it can be used sensibly. Unexpected emergency medical bills not covered by your installment payments can be paid off. Overdue bills can add up while you are recovering that you may need to clear. All are valid reasons for requiring a lump sum. If selling do all possible to avoid selling the entire settlement to ensure some form of ongoing payments.
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