Why Not A Lump Sum Option At The Time The Settlement Is Awarded?
This is a good question, and one that needs to be answered in order to clear up any confusion. A lump sum option isn’t available at the time the settlement is set in place because the insurance companies that is paying the lump sum would go bankrupt within a relatively short period of time.
Many of the insurance awards are for thousands and thousands of dollars, some even into the millions. Imagine if one insurance company had to settle up with one-hundred or so claims within any one calendar year. They wouldn’t be able to keep up. A structured settlement company, however, allows the insurance company to stay in business, and the recipient of the settlement still gets their money, just over an extended period of time. It’s a win/win situation for everyone involved.
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