When most slip and fall cases settle, the injured victim receives his compensation in a lump sum payment of the entire amount he is owed. However, in certain situations—like when the injuries are long term and catastrophic or the victim is a minor—a structured settlement may be beneficial to the victim. If you are considering agreeing to a structured settlement, you need to understand how they work to decide if one is right for you.
How You Get Paid in a Structured Settlement
A structured settlement is an agreement between you and the insurance company to pay you the settlement amount in installments spread out over a number of years or for your life. The terms of the structured settlement are negotiable, and you want to time the receipt of your payments to be most beneficial to you. You could structure your settlement in a number of ways:
- Larger initial payment. If you have been off work for a long time with little income, you may have gotten behind in your bills. A larger lump sum payment could enable you to catch them up or you may want a large first payment to pay off your mortgage or purchase a new vehicle. Later monthly payments would be smaller to replace your monthly lost income.
- Bonus amounts in particular years. Some settlements are created to provide a yearly income, but also a larger amount in years when the victim anticipates high additional expenses, like college tuition, later expensive surgery, or needed home improvements or modifications.
- Payments increase in later years. In some structured settlements, the payments start out small but increase at a later time. This could be helpful if you know you will need additional monthly income later on in your life.
- Delayed payments. In some cases, the victim may choose to delay his payments until a later date—for example, when he retires. You may want to choose this option if you or your spouse is still working and you will need the monthly income more at a later date.
Often the insurance company will provide an annuity policy that pays the victim the structured settlement amount under the terms the parties agreed upon. There are pros and cons to structured settlements. They can be complex and could result in tax consequences, depending on your circumstances. That is why it is critical to obtain advice from an experienced slip and fall attorney before agreeing to a structured settlement.
If you were injured in a slip and fall accident, check out our firm’s testimonials to see our client referrals and then call us at 866-299-0558 to schedule a free, no-obligation consultation.