More Benefits

Structured settlement payments on the behalf of minors have significant advantages over cash settlements. Firstly, with a cash settlement the individual could have immediate access to the funds when they turn 18 years of age. This could mean handing a very large check to a 18-year-old. Not always a wise choice. Additionally, the investment of the settlement proceeds may be governed by the probate court. With a cash settlement, tax returns must be filed each year until the minor reaches the age of 18 years old. This in itself could be a paperwork nightmare. If a structured settlement is set up instead, a lot of these headaches can be avoided.

For individuals that have serious health problems that will continue throughout their remaining years, a structured settlement payment certainly has significant advantages over cash settlements. As a group, people with serious health problems, statistically will live shorter lives than the population as a whole. This fact allows the life carrier underwriting the payment structure to provide a greater monthly benefit to the person with health problems. This is called mortality risk, and life insurance companies are in the business of assuming mortality risk. Now, in order to prevent the life insurance company from reaping a windfall should the individual die soon after payments begin, it is recommended that placing a minimum requirement of the number of guaranteed payments in the settlement is done.
 

Return