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Posts tagged Claim
How to Settle a Big Accident Claim
Nov 4th
In recent years, big accident claims are burgeoning. Insurance companies have to shell out large sums of money in such claims. Therefore, they are now trying to discover cheaper ways to settle these whopping claims.
Insurance companies have two main alternatives to settling big accident claims. One is through structured settlements where periodic installments are paid to the plaintiff and the other is through a lump sum cash payment. Structured settlements usually consist of cash upfront and the rest paid in installments spread over a number of years. Usually, this kind of agreement is offered to accident victims if the victim’s case is strong and the odds are in favor of the victim winning the lawsuit.
Claimants need to be sharp while handling these situations. If the settlement looks too good to be true, it probably is. More often than not settlements that seem appealing to the injured party are not all that favorable. Sometimes, the company may also attempt an out of court settlement if the defense attorney is of the opinion that the plaintiff’s case is strong.
Settling a case before a trial begins may sometimes be the best course to pursue. It is often advantageous to both: the defendant as well as the plaintiff. A structured settlement may benefit both parties at this point. On one hand, the defendant gets time on his side to pay the plaintiff in fixed periodical installments. On the other hand, the plaintiff gets the advantage of financial security over a period of time.
Once the case reaches a trial, the court also has a direct bearing on how a big accident claim is settled. A number of aspects are considered. The court may ask the defendant to create a trust for the victim. It may also instruct the defendant to purchase an annuity for the victim. In each case, the victim should be assured of receiving a stable periodic compensation.
But while agreeing to accept structured settlements, the claimants have to bear in mind that these settlements often do not take into account the time value of money. In short, this means that inflation will have no bearing on the settlement. So if you calculate the loss incurred over a number of years, the amount will be sizeable. Inflation is therefore an important factor to be given due weightage while deciding on structured settlements.
All said and done, the most prudent way to settle big accident claims should be worked out by the insurance company and should be feasible to both parties.
Popularity: 12% [?]
Why Structured Settlements are Better than Lump sum Payments
Oct 28th
It’s often been debated as to whether structured settlements are preferable to lump sum payments. Generally, the particular situation in question is considered while weighing the pros and cons. But by and large, the general view is that structured settlements are better than lump sum payments for a number of reasons.
In the case of accidents and injuries, people usually resort to lawsuits to try and recoup the damages sustained as a result of the accident. Structured settlements were not always an option. It is a concept that’s been around for only 20 years or so. Before that, if you won a lawsuit, the settlement was in the form of a lump sum cash payment. The idea behind the lump sum payment was that the victim could invest the money sensibly so as to obtain a decent amount for the rest of his life. Alas, this was not always the case. Thereafter, the concept of structured settlements came into existence wherein the award would be spread over a period of time and the plaintiff given money periodically (i.e. monthly, quarterly, yearly etc.) The manner of distribution of payments was decided and was called Structured Payment Annuity.
Structured payments give a sense of financial security to the plaintiff since he is assured of a fixed periodic income. This is the most suitable in case of kids. Children are not always in a position to comprehend the extent of damage caused and the repercussions of that damage. Getting a structured settlement in this case makes sense so that they get a fixed sum of money throughout their lifetime. Moreover, the award amount in some cases is massive especially where the damage to the child is grave, irrevocable and in some cases even permanent. In this case, to prevent misappropriation, sometimes structured payments are more beneficial.
Even if you get a structured settlement, and find yourself in dire straits financially, you have the option to sell of the settlement to a third party and get cash immediately. Moreover, you can choose to sell it either partially or completely. So, if you ever find yourself in a crunch, there are many companies who are willing to buy structured settlements from you in exchange for lump sum cash. Just be cautious and do your research to get the best deal.
Structured settlements are also a better option for insurance companies and others who have to bear the burden of a huge settlement award. They can reduce their burden by making staggered payments rather paying bulk cash upfront.
Popularity: 2% [?]
