There are many times when the company uses structured settlement when settling large financial claims to its staff. This may happen during layoffs but is more prevalent when settling an accident claim or when the company agrees to compensate the staff with a large financial settlement for other reasons.
Non-senior staff earning a few hundred dollars a month may get overwhelmed if suddenly paid several thousand dollars. Research has proved that large cash bonanzas lead to rash and wasteful expenditure and the money is quickly squandered. A structured settlement for cash involves the money being paid in small sums over an extended period of time. The staff is therefore not overwhelmed and is more likely to save, invest, or spend the money wisely. Another equally big advantage is that, in a structured settlement investment the company does not have to source the entire amount at one go. Since the payments are small, the company can make pay-outs as part of the regular monthly transactions.
Businesses or Companies however, are often hesitant to adopt a structured settlement quote course (especially in the event of a closure), because it involves maintaining records and staff to administer the structured settlement payment. Not any longer.
Thankfully, today, there is a new service available that is provided by companies popularly called “structured settlement companies”. For a relatively small sum of money as service charges, these companies will not only custom formulate cash for structured settlement payment for your staff, but they will also oversee the entire implementation and payment process. Money can be paid to the structured settlement company every month or quarterly or half-yearly or periodically based on whatever terms the parties might have agreed to.
The compensating company can also hire an auditing firm of their choice to audit the payment process. This brings in an element of safety for the compensating company as well as the staff.
Advantages of cash structured settlement:
- Receiver of a large financial settlement is not overwhelmed by a large infusion of cash - Receiver of the financial settlement is assured of a regular payment and can accordingly plan the expenditure or investment
- The compensating company does not have to source the entire money upfront and hence there is no overwhelming burden of taking an expensive structured settlement loan to settle financial claims
- Professionally managed Structured Settlement Company provide custom designed plans that can be audited and supervised by reputed auditing firms
- The compensating company is free from the burden of having to administer the structured settlement and can therefore concentrate on regular business
- If the compensating company has the entire money available, it can opt to invest the sum in an Annuity Scheme with insurance company and the insurance company will make the payments directly to the staff or concerned party as per terms of the structured settlement.