What can we describe as a structured settlement?

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A Structured Settlement is a payment or as we can say compensation paid to one party to the other in the event of an unfortunate or unfavourable incident. It may be voluntary or be the result of a legal battle where the aggrieved party is paid the remuneration for the wrongs done against him/her.

·         Structured Settlements may be made as a lump sum or over a period of time in parts decided by both the parties which may or may not be subject to conditions agreed upon by the parties.

·         A Structured Settlement annuity can be simply put forth as the payment of compensation over a period of time. It is also seen frequently that the parties which are at fault pay out the compensation over a time period in equal parts by employing the services of an insurance company. This is also beneficial as there is proof for the transaction being made.

Certain cases where we can use structured settlements are!

·         Individual Injury – cases where an aggrieved party seeks remuneration or compensation for the wrongs done to him/her. The claim is submitted by the party aggrieved and a compensation is received on account of the wrongful incident.

·         Compensation for workers – The perfect example of such can be given when there are scarce amounts of funds for a labourer when he/she is temporarily incapable of working and earning to pay for his/her treatment and hence the company employing them pays up. This of course happens only in cases where the employee is harmed while on duty.

·         Hospital malpractice – In a country like India we can always expect negligence and where it is legally recognised as a criminal act and penalties and compensations already decided for, the payments shall be claimed by the patient or the kin of patient in the event of wrongful actions carried out by the hospital.

·         Wrongful Death – In the event of a calamity like hurricanes or floods the government shall provide remuneration to the injured or the kin of the dead to ensure treatment of the injuries or survival of the families in the event of death or injury.

But, there are also some pros and cons of structured settlements that arise! 

·         Pro – The advantage of having structured Settlements is that wronged parties can avail the conviction of instalments over time period that has been agreed upon by both the parties after a proper discussion. 

·         Con – After the payment has been made, in case of future financial emergencies caused by the events of the wrongful incident, one cannot seek further remuneration as it shall be termed as exploitation or extortion.