Obtaining a structured settlement typically happens through a legal process or negotiation, and it generally occurs when you’ve been awarded compensation in a legal case. Here’s how to get a structured settlement:
- Engage in a Legal Case: You first need to be involved in a legal case where you are seeking compensation. This could be a personal injury lawsuit, a medical malpractice case, a wrongful death claim, or any other situation where you are the plaintiff (the party seeking compensation) and another party is the defendant (the party responsible for the harm).
- Negotiate a Settlement: In many legal cases, rather than going to trial, the involved parties may decide to negotiate a settlement. During these negotiations, the terms of the settlement, including the structure of the compensation, are discussed and agreed upon. This is where the structured settlement comes into play.
- Determine the Terms: In the settlement agreement, you and the defendant, or their insurer, will agree on the terms of the structured settlement. This includes the amount of the settlement, the schedule of payments (e.g., monthly, annually), and the duration of the payments. You can work with your legal representation to negotiate terms that align with your financial needs and goals.
- Legal Approval: Once the terms of the structured settlement are agreed upon, the settlement agreement is typically subject to court approval. This is to ensure that the settlement is fair and reasonable. In some cases, a judge’s approval may be required.
- Annuity Purchase: To fund the structured settlement, an annuity is often purchased by the defendant or their insurer. An annuity is a financial product that provides a series of payments over time. The annuity issuer is responsible for making the payments to you according to the terms of the settlement.
- Receive Periodic Payments: Once the structured settlement is in place and approved, you will begin receiving periodic payments as specified in the settlement agreement. These payments are designed to provide you with financial security over the agreed-upon period.
It’s important to note that structured settlements are not something you can proactively seek out on your own; they are a result of a legal process and negotiation. If you are involved in a legal case, it’s crucial to consult with an attorney who can help you navigate the legal process, negotiate a settlement, and determine whether a structured settlement is the right option for you based on your financial situation and needs.