Structured settlement is what you get if from a court tort claim. Instead of getting a lump sum settlement, the court will have the amount divided to multiple scheduled payments that will be completed over time. This was conceptualized to prevent any possibility of mishandling the fund by the recipient. This scenario typically happens when a recipient is overwhelmed by the large amount of money that is awarded to him. Having such fund accessible to him promotes spending sprees that eventually lead to bankruptcy in no time.

Structured settlements can be made in various ways that will suit the recipient’s needs. The deferred payments can be divided on a yearly, bi-yearly or monthly basis. It is usually structured to make sure that the claimant’s medical and personally needs are well taken care of. Although it is primarily designed with the recipient’s welfare in mind, there are instances that the scheduled payments may not serve its purpose.

A good self-assessment is needed to determine if the structured settlement is beneficial to you. This usually works best on a tort claim due to permanent disability. Obviously, the disability limits your ability to be gainly employed. The scheduled payment can serve as a regular income along with the Social Security benefit that you may be getting from the government. And what’s even better is this income is tax-free.

Structured settlement payments can also cover the claimant’s medical bill. Having guaranteed money to cover for these expenses alleviates any burden that may be felt by family members, thus, providing a meaningful life to the recipient despite his medical condition.

However, if you are an elderly who may not see the end of the structured settlement, you may want to consider your beneficiaries’ welfare and opt to have it sold lump sum. Then you may also put the money in a trust that your family can use in the future.

Structured settlements will always be good for the recipients. The may let the periodic payments help them with their every day needs, or opt to sell it with the purpose of using the lump sum for more immediate needs.