Structured Interview Question:

What are the disadvantages of a structured settlement?

Submitted by: Muhammad

► The periodic payments can't be borrowed against, deferred, accelerated or changed once set up,
► Default risk, meaning the life insurance company that is selected becomes unable to make the payments. However, this risk is small due to the well-capitalized life insurance companies that are used for structured settlement annuities. Additionally, there are state insurance guaranty associations for every state that guarantee annuities up to a certain value (this excludes workers' compensation reinsurance). Finally, settlement proceeds can be spread among several different life insurance companies to lessen default risk.
Submitted by: Muhammad