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Structured settlement can be referred as cash compensations payable over a period of time by way of regular payouts. The party paying could be anyone- an individual, a company, organization or a group. Settlements are an alternative to one-time settlements. The payer gets time allowance and in return he has to pay the actual settlement price plus the time value of money. Thus, the entire structured settlement cash amount includes the actual settlement value plus the interest. Even though the system might sound infeasible for the compensator, the provision of settlement is treated as an inevitable offer by most of the claim settlers. This is true especially in case of insurance companies that are required to make huge payouts in favor of their thousands of claimants.
Structured settlement cash is received in annuities and the payment amount and interest rates are decided as per the terms and conditions agreed upon by the receiver or the claimant and the compensator or the payer. Even though settlements are becoming increasingly popular, in reality no one likes the time lag created in this system. In most of the cases, an aggrieved party agrees for a settlement out of sheer desperation. He might be in a situation where settlement becomes the only feasible option left with him. Instead of letting the settlement in jeopardy, the claimant decides to put up with a slow realization of his claim amount. And unless the interest charged on the payouts are exceptionally high, there is nothing to look forward in a settlement.
These are some of the reasons why people opt for selling their settlements to companies that deal in this kind of transactions. There are financial agencies and companies that concentrate on buying settlements from private parties and business firms on a discount. They pay a fixed lump sum to the claimant in return for the settlement rights.
Nevertheless, the claimant is freed from his structural agreement but the sale amount would be reasonably less than the entire structured settlement sum. Thereon, the buying company is responsible for collecting the structured settlement cash from the payer.
