What is a Structured Settlement?
Hi. I’m Indiana, personal injury attorney David Holub. This video is about structured settlements.
You’re probably wondering what in the world is a structured settlement. Well, it’s a long-term annuity contract, which is purchased by a defendant to pay out to a plaintiff over time.
And you’re probably wondering, well, why would anyone want to have settlement money paid out to them over time? I’ll give you some examples.
One reason would be to preserve government benefits.
Suppose the injured person receives supplemental, government insurance.
And sometimes people do this if they are on Medicaid or Medicare disability.
One of the problems is that a person can only have a certain set amount in their checking account.
To maintain qualification, their checking account is checked each month.
So a structured settlement basically will pay out x number of dollars each month for a number of years or a number of months depending upon how much money is set aside in the structured settlement.
Another example of where this might be useful is suppose you’re a nursing home patient and you’re injured in the nursing home where they drop you and fracture your hip.
You might want to obtain a structured settlement that would pay out money for that injury over time And you can also have a beneficiary named. So if something happens to you, and you die in the next few years, the beneficiary gets the benefit of that settlement, and you can name multiple beneficiaries.
I hope this helps you understand a little bit what a structured settlement is and why, some people may want to purchase a structured settlement or a range of structured settlements with the defendant.
And also keep in mind that the government permits these types of settlements.
They want to make sure that a person who’s catastrophically injured can maintain their benefits and at the same time, use the money that is gained through a settlement to help supplement their care. And if you look at it from a government perspective, if a person were to be disqualified from, let’s say, Medicaid or Medicare, supplemental insurance benefits, then the minute their money is used up, they would then have to go through the entire qualification process again. So the government is okay with what is done in arranging a structured settlement.
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