A plaintiff agreeing to a structured settlement should guard himself from certain exploitation as regards the settlement. People will always try to get out of unwanted financial obligations and insurance companies and individuals are alike in this aspect. Factors to consider when accepting a structured settlement are as follows:
The plaintiff should be wary of excessive or hefty commissions. It is common knowledge that annuities are usually very profitable since they come with very large commissions for insurance companies. Thus, it is important for the plaintiff or his financial advisor or attorney, to see to it that the commissions charged for the commencement of the structured settlement, do not eat into a percentage of the principal amount.
A huge majority of people who are awarded a huge workers compensation or personal injury settlement usually have a life expectancy that is shortened as a result of the injuries that incurred. Therefore, it is so important to take the life expectancy factor into consideration when discussing any settlement and to consider if it is wise to acquire an annuity where payments cease with the death of the claimant. It makes more sense to insist on an annuity that will pay a fixed number of payments or even one that will pay the pending balance into the estate of the deceased plaintiff. This ensures that the full value of the settlement is not lost upon the plaintiff's death.
Another factor to consider especially in terms of very large settlements is the using of more than one insurance company. It would make sense for the plaintiff to purchase annuities in a structured settlement from different companies, thus dividing the settlement among those companies. This provides more protection in cases where an insurer may be declared insolvent. This ensures that even when one company defaults in its payments, the plaintiff would still be paid by the other companies.
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Purchase The Structured Settlements