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A structured settlement is a type of annuity that pays a civil action reward by dividing payments over a long period. A structured settlement often offers a better money guarantee than a one-off payment. In the case of financial problems or major events in life, however, structured payments can be settled on a lump-sump basis.
Despite all legal language, structured settlement are simple. Many lawsuits ensure that someone or a company pays money for another person to correct an error. Claimants can accept the settlement themselves or they can be forced to pay the money if they lose the case in court.
If the settlement is small enough, the injured party can get the chance to obtain a global agreement. However, a structured settlement pension can be agreed upon for larger agreements.
In this case, the debtor deposits the money into an annuity, a financial product that guarantees regular payments from an insurance company.
The structured settlement settlement states the number of payments received by the injured party as compensation for the damage suffered. Structuring money for a longer period offers a better future for financial security, because only one payment can be spent quickly.
Structured settlements became popular in the 1980 after the United States Congress adopted the regular payment law. According to the National Union of Structured Arrangements, about $ 6 billion of new structured settlements are spent annually.
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