Potential Disadvantages of Structured Settlements
Claiming a monetary compensation for loss or injury in a particular situation is very commonly settled through a structured settlement. This system of payment works well generally for both the defendant party and the claimant. While there are many benefits of settling a claim through a structured settlement, it has its downside too.
- A structured settlement once decided is a fixed feature and is impervious to changes later. This can be difficult for the claimant whose life situation may vary in times to come. A person making injury claim may develop unforeseen medical complications in later years which would not get covered by the settlement.
- A structured settlement can take as long as six months to come to realization. The documentation,the legal hassles involved and supplementary attorney fees can prove to be a tedious affair for some.
- This arrangement of receiving periodic amounts, often extending to a lifetime, leaves the claimant feeling trapped with no money to make large scale purchases like home, car etc.
These could be some reasons why people choose to sell their life annuities and break away from the conventional structural settlement.