Structured Settlement Basics

What really is a Structured Settlement?

Structured Settlements occur when when people are unfortunately involved in an accident or where there is a wrongful death occurance. Personal injury settlements are often reached with insurance companies whereby the injured plaintiff may choose to receive a series of payments over a period of time rather than an immediate one time lump sum payment. These payments usually total more than one would have received in an immediate pay out.

In order to make this election, the injured plaintiff signs what is known as a Settlement and Release Agreement that allows the Defendant insurance company the right to purchase an annuity policy to cover the payments to the injured Plaintiff(also known as the annuitant).

The plaintiff may now sell these insurance settlement payments to any third party if they choose. These cash flow payments that derive from that insurance company annuity may be exchanged at anytime in the future for a present day lump sum, like any other cash flow with some minor legal restrictions. All transactions must be court approved for the protection of the injured party.

These judicial guidelines must be followed in order to complete the transaction:

The sale must be announced to all interested parties and then submitted to the court for approval. A Transfer and Assignment Agreement must be signed by the seller
following full disclosure, in writing, of the price and other contractual terms.

This is a rather quick court proceeding, although like any other judicial procedure, it does take time. Plaintiffs should not expect the transaction to be completed, and to be funded, for at least 90 days. In order to help facilitate the
transaction process, Plaintiffs need to respond quickly to information requests.

An experienced broker, like Allsettlements.com, working with the major institutional funders, will ensure that all requirements are met in a timely fashion.

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