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What You Must Know About Structured Injury Settlements

Legal Settlement - Blank Check Disbursement
A lawsuit settlement check with the words Your Name Here, indicating that you could be eligible for a big payout on a legal suit

After being involved in an accident generally, it will result in an insurance company claim in most personal injury cases. This means when a settlement gets recovered, the insurance company will pay out a sum of money to the claimant. The claimant is the injured party.

  • But when it is a large settlement, the insurer will often want to pay the total amount over a period, rather than paying it all at one time.
  • In personal injury law, this is referred to as a “structured settlement.”

When the injured person has medical bills and other immediate needs for a significant amount of money, the structured settlement may not be enough monetary recovery at one time.

  • In this case, the claimant can obtain most of the full settlement amount from a third party buyer. This will mean that rather than having steady settlement income, they will receive it in a lump sum. And it gets paid from the third party for a specific cost.

This means there will be some financial loss on the part of the claimant. But they will have a full settlement, rather than the amount divided into payments. This can be an attractive advantage for some injury victims in need of immediate payment. The laws for this type of structured settlement third-party involvement varies from state to state.

Is the Lump Sum Fair?

The important issue is whether or not the third party buyer is offering a fair value for the lump sum structured settlement amount. The person who has received a structured settlement should consult a personal injury legal professional. In fact, they need one with experience in this area of the law in their state.

Information in Structured Settlements and Third-Party Buyers.

There is information that will be necessary when dealing with a third party buyer and a structured settlement, including:

  • Basic information about the settlement, including the name of the insurance company, the total amount of the settlement, and the structured settlement payment plan.
  • The third party buyer will review the total settlement amount and determine if they will take over the structured settlement plan.
  • They will make an offer to the injured victim, and if the tender sounds reasonable, the claimant will be required to provide specific documents involving the settlement.
  • A contract will be created to be signed once an agreement has been made involving the transaction.
  • Once the deal has been made, the contract will be submitted to the court to be approved legally. This makes it a binding contract for both parties.
  • The court will render a ruling within a few weeks either approving or denying the contract agreement. Upon approval by the court then the transaction of the lump sum will take place within a short period.

Southern California residents may consult Ehline Law Firm when considering a third-party buyer for a structured settlement plan lump sum. These legal professionals at the law firm can be reached at (213) 596-9642 to help determine if the lump sum agreement is in your best interest.


Hindert, Daniel (1986). Structured Settlements and Periodic Payment Judgements. New York, NY: Law Journal Press. pp. 1–36. ISBN 1-58852-037-4.

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Michael Ehline - PI Law Tutorials

Michael Ehline is a highly trained personal injury attorney in Los Angeles, CA. He writes educational articles to help injured consumers.

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