Many a times, it is observed that people are thrilled and satisfied to have a structured settlement. They contend with the knowledge that for a specific time of the month or year and at a particular time they will be receiving financial compensation. But, looking at the larger perspective, getting a small amount of money over a long period of time may not be ample for the needs of the person. The reason for compounding this settlement award can be a car accident, slip and fall injury, on the job injury or any other kind of injury that prevents them from working for the rest of their life.
People are often seen to opt for the lump sum payment in a single go than opting for the long term payment schedule. This gives the very reason for the structured settlement companies come forth into play. It is a business that has been set up for the benefit of the individuals to buy settlements from them in exchange for paying them a one-time payout in cash.
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How The Structured Settlement Works
The structured settlement companies offer lump sum money to the individual who has been awarded the structured settlement. The offer made by the companies is dependent on the amount of money that is received or yet to be made available to the individual. If the individual chooses to sell their settlement, they receive a lump sum money from the structured settlement company which in turn will get the exclusive right on the settlement money awarded to the individual. The individual will only get some percentage of the total amount of money he is to receive from the company. Supposedly, if the individual has been awarded $10,000 for five years, the total amount to be received by the individual will be $50,000. The structured settlement company will offer a lump sum payment that ranges between $25,000 and $30,000 against the total receivable amount that the individual can get. The exchange offer made by the companies decrease in value with the increase in the time frame of the settlement payment.
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How The Law Safeguards The Rights Of The Individual
The law of this exchange made between the individual and the structured settlement company varies from state to state. The law, in order to safeguard the interest of the individual requires the transfer of the rights of the settlement payment to be agreed with the judge. This law has been laid to abstain the devious companies take the good of the individual. The urgent of money often clouds the judgment of the people, which these structured settlement companies take advantage of.
Keeping in mind the benefit these structured settlement companies provide to the individual, following are the advantages and the disadvantages discussed in detail.
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The Advantages Of The Structured Settlement Companies
For people who require money instantly, the structured settlement companies are a boon. The structured settlement companies give the individual instant cash to take care of the medical bills and the treatment. The exchange is more of a miracle to the individual. People can utilize the lump sum payment in a better manner. The cash lump sum payment can be invested for future considerations.
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The Disadvantages Of Structured Settlement Companies
With the advantages that the structured settlement companies give the individual, there are disadvantages as well. The structured settlement company makes profit by purchasing the settlement from the individual at a heavy discount. They forge the people by making the one-time payment but not giving the full value of the settlement. The discounted offer the companies make to the individual ranges somewhere between 25-30 percent of the total value. The settlement companies ride on the total payment to be received by the individual.
There can be no definite answer whether the structured settlement companies are best to exchange your settlement or not. The individuals are also on the risk of dissolving their one-timed exchanged settlement money easily.
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Author Bio ? Paul has written a lot of articles for the readers. His article on cash loan has been appreciated by the people. He has started sharing information with people through his articles and blogs.
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