Being injured in a motor vehicle crash is a very upsetting experience. At first, you have to deal with the mental and physical stress of the crash and the injuries you suffered. As time progresses, many victims will also have to add in financial challenges because most people don’t have enough money sitting around to cover medical bills and make up for missed wages when there’s a catastrophic crash.
Some victims of car collisions opt to pursue a claim for compensation to help offset the financial challenges of the crash. While it’s possible to have any settlement paid in cash, other settlement structures are sometimes used in these cases.
Types of settlement structures
There are four primary settlement structures that can be used. Each works a little differently and offers a different level of protection for your assets. It’s important to balance out the need for liquidity, or having readily available funds, with asset protection.
- Cash: This is the most widely chosen option since it provides victims with liquidity; however, this doesn’t offer any protections for the settlement.
- Managed investment accounts: Instead of receiving cash in your hand, the settlement funds go to an investment account. You’d have to contact the investment advisor to get money.
- Settlement trusts: This option enables certain stipulations to be placed on the funds, but it comes with some flexibility and more protection than cash or managed investment accounts.
- Structured settlement annuities: This option provides you with regularly occurring payments that are tax exempt. These have considerable protection but aren’t nearly as flexible as cash.
Understanding what’s going on in your personal injury claim is important so that you can make informed decisions and plan for what’s to come. Be sure that you know what type of settlement is being offered so that you’re able to protect your financial future.