In most auto collision cases, the victim agrees to accept their settlement with the negligent driver’s insurance company in a lump sum payment. However, in certain situations, it may be better to accept payments over time in a structured settlement.
What Is a Structured Settlement?
A structured settlement is an agreement where the accident victim agrees to accept their settlement proceeds in payments over time. The terms of the agreement are negotiated and can be tailored to meet the specific needs of the victim.
Individuals often receive an initial larger payment and then smaller payments that are paid monthly or at other set intervals. The payments can be paid over several years or for the victim’s entire life.
When You May Want to Accept a Structured Settlement
A structured settlement may be a good option for you if you suffered serious injuries and are receiving a large settlement from the insurance company. Here are some reasons why you may want to agree to one.
If you suffered permanent injuries that prevent you from working and will require expensive medical treatments in the future, you may want to accept a structured settlement. By spreading out the payments over time, you can ensure that you will have the money you need to replace your income, pay your medical bills, and get the personal care you may need throughout your life.
While much of a car accident settlement is not taxable income, some amounts, such as punitive damages and interest, could be taxed. You would spread out your tax liability by accepting your settlement proceeds over time.
Control Over Spending
If you are worried that you will not spend your settlement wisely if you get it in a lump sum, you may want to accept a structured settlement. You can work out an agreement so that you receive larger payments when you really need them, such as for expensive medical treatments, college expenses of your child, or other large expenses that you anticipate in the future.
Minor Children Settlement
If you are settling a car accident claim on behalf of your minor child, you most likely would want to accept the payments through a structured settlement. If your child needs medical care and income throughout their life, this can provide them with the regular income they need. The payments can also be designated for their future college expenses.
Do you have additional questions about whether a structured settlement is right for you? Do you need help negotiating your settlement with the negligent driver’s insurance company? Call our Norfolk office to schedule your free consultation with our knowledgeable car accident lawyers today.