The business of structured settlements is one of the fastest growing commercial activities in the world. This business comes from the fact that there is an increasing number of compensation awards coming from lawsuits for the removal of any liability being imposed upon another. The compensation award comes in the form of settlement payments that are made over a period of time.
In order to fulfill the payment of compensation as mandated by the agreement, structured settlement companies would do the payments to the recipients over time. There are two common methods how the compensation is paid out, which are as follows:
- The buy and hold method. This is done through the purchase of the paying party of an annuity or life insurance from a reputable company. Here, payments would be made to the receiving party over a specified period.
- The assignment method. This is done through the assignment of a third party who would pay out the settlement, either directly or through the purchase of an annuity.
Either method needs to be confirmed by the court of with jurisdiction over the case. This is not an automatic choice made as there is a whole business and market for this. This is where structured settlement companies thrive and exist, to address the demands for the payment of compensation for injured parties over a given period of time.
Finding the Right Structured Settlement Companies
There are specific companies that oversee the process of making these installment payments over time. Unfortunately, there are structured settlement companies that perform their duty faithfully while there are others that rather than be solutions to these problems, exacerbate the injuries and damage sustained by hapless victims that expect the compensation. In order to separate the false ones from the right structured companies, the following are the qualities to look for:
- Company’s Reputation. One of the key qualities to look for before engaging the services of a structured settlement company is its reputation. This can easily be found through a simple online search to see what the general public says about a company. If there are many negative comments regarding a company’s payouts, then one should be on guard against them as they would only become part of the problem instead of being part of the solution.
- Relationships with Principals in your case. One needs to undertake an in depth research as to possible relationships, be it legal or not, between the structured settlement company and the principals in your case, such as the lawyers or even the respondents. This would avoid any conflict of interest from arising that can lead to the further injury of the recipient of the structured settlement. If a structured settlement company is in cahoots with opposing counsel, then the calculation of the payouts receivable may not be the proper compensation that is to be received.
- Diversification of Payout Companies. Like all companies, its financial life is still subject to the winds of change. Recent history has shown that even the most financially stable companies can be wiped out in an instant because of the actions undertaken by a few of its subordinates. Thus, it is now recommended that instead of having one structured settlement company to do all the installment payments, it is best to have a number of firms to do the job. This would prevent any dislocation of payments to occur that would affect the compensation to be received over a period of time.
The role of structured settlement companies in the whole system of compensating injured parties cannot be gainsaid. Finding the right one in order to receive the installment payouts must be done in order to achieve the purpose of the structured settlement. Read more to find out out more about what makes a good settlement funding company.