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Insurance settlements should be carefully reviewed prior to their acceptance. There are several important questions every individual or their attorney should ask prior to agreeing to the terms of a settlement.
If the settlement is not paid in a lump sum, inquire about the payment structure. Potential payment structures include periodic payments that arrive either monthly or yearly or the insurance company establishing an annuity or other investment for the recipient. In the latter case, payments would be delivered according to the terms of the investment. Do not expect that payment will be a lump sum payment unless that type of payment is specified in the insurance settlement.
Another important question to ask about your settlement is whether 1) the court must approve the settlement. If the court must approve the agreement, it is not binding until after official court approval has been obtained. The settlement that you read, therefore, might not be final. Make sure to determine whether you can rely on the settlement before you or if you should wait until after the court hearing to depend on its terms.
You should also as about what happens should the insurance company is bought, sold or joined with another company. In any of these cases the new insurance company might not be required to abide by the settlement’s terms. This is of particularly importance when payments are to be made over a long period of time.
If you are unsure about the terms of a settlement offer made to you, seek legal advice. A lawyer will review the settlement and discuss with you any areas that could be problematic.
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