Which type of settlement is designed for large claims and made in a series of smaller payments over time?

A structured settlement is specifically designed to handle large claims by breaking down the total amount due into a series of smaller, manageable payments made over an agreed period of time. This method is particularly beneficial in scenarios where the claimant may need to receive ongoing support instead of a lump sum payment, which could lead to mismanagement of funds.

Structured settlements provide both the insurer and the claimant with flexibility and security, allowing the claimant to receive payments that can help cover medical expenses, lost wages, and other ongoing costs associated with their claim. The structured nature of the settlement ensures that the claimant has a predictable income stream, which can be essential for long-term financial planning and stability.

This type of settlement is often used in personal injury and disability claims, where the financial implications extend well into the future and require ongoing consideration for living expenses. It also helps mitigate the risk for the insurer, as they can manage cash flow better by spacing out payments over time rather than disbursing a one-time large sum.

Other options differ in their structure and purpose: a full release denotes a one-time payout that absolves the insurer of any future liability; advance payment refers to an immediate payment of a portion of the claim; and scheduled release pertains to planned disbursements