What Do Structured Settlements Represent?
Structured settlements generally represent payment for civil wrongs that were suffered because of a criminal or negligent act, including physical, emotional, economic or reputation injuries, as well as property, constitutional rights or privacy violations. Common types of actions that end up as structured settlements for the victim or the victim's family include car accidents, product liability, copyright infringement, false imprisonment, dog bites, defamation, wrongful death and environmental pollution.
When the structured settlement is awarded to the victim or his or her family, it represents compensation for the wrong they suffered and signifies, in most cases, the end of the court process. However, receiving that compensation in the form of a structured settlement which takes the form of an annuity can be frustrating because often, the victim needs a lump sum of cash to handle expenses. Knowing there is a future income stream in place can be great for future planning, but it does very little to address immediate cash needs. In many cases, victims assume they will receive one payment if they prevail in the case and are disappointed and frustrated to learn that they will instead receive annuity-like payments.