Structured Insurance Settlement Payments
The buying or selling of structured insurance settlement annuities must be supervised by a court of law. The reason for that process is that it is a way of making sure the people who are recipients of a certain settlement will not end up being scammed by conmen. Most cases of structured insurance settlement are due to a death case that went wrong or also a person who is incapacitated.
These types of settlements not only benefit the defendant, but also people like the plaintiff. When the process of negotiating a settlement is underway, a plaintiff is assured of getting a certain amount of structured insurance settlement. Since this income will come in the form of installments, which will in turn help the defendant to be able to pay for his medical bills and every day living expenses.
The defendant is also given powers to be able to control the funds that are gotten from the plaintiff. The process that is normal is that the defendant will be able to buy annuity from an insurance company. This annuity is used to provide someone with an assured structured insurance settlement. By the sale of this settlement, the person who was given it will be able to get a large amount of money usually known as a lump sum.
In the year 1982, The United States Congress passed a Periodic Payment Settlement Act which was given the mandate to regulate any legal process that would entail the negotiation of these types of agreements. The Congress also included a clause that stated the revenue which is collected to be considered as a tax – free source of income. This would help the affected persons be able to get the maximum from the structured settlement that was awarded to them.
Though this step has been seen to be very helpful, it requires a court review any time that the client would want to sell their settlement. This review would in turn prevent people from overspending their annuities or using the funds that they got from the settlements to purchase unnecessary items. Legal restrictions have made it impossible for insurance companies to be able to change the payment structure of a structured settlement.
Payments in the future can however be considered as assets of the injured party. This means that the defendant can be able to sell the settlement in the future.