Understanding Structured Settlements After a Tempe Car Accident
If you’re injured in a Tempe car accident and reach a settlement with the at-fault party’s insurance company, you may be presented with a choice: take a lump sum payment or receive your compensation through a structured settlement. For many crash victims—especially those dealing with long-term medical care or permanent injuries—a structured settlement can offer financial stability over time.
But how do structured settlements work? And are they the right option for your Tempe injury case? At Tempe Car Accident Attorney, we help clients weigh the pros and cons of each payout option and structure settlements to support their long-term recovery and financial goals.
What Is a Structured Settlement?
A structured settlement is a series of periodic payments—usually monthly, quarterly, or annually—paid out over time instead of one large lump sum. The payments are typically funded through a special annuity, arranged by the insurance company or their financial partner.
Structured settlements are common in high-value cases, especially those involving:
Permanent disability
Child injury cases
Wrongful death claims on behalf of dependents
If your injury happened in a serious crash—such as a rollover, T-bone collision, or DUI accident—the insurer may propose a structured payout to manage risk and provide long-term support.
Why Would Someone Choose a Structured Settlement?
There are several potential benefits to choosing a structured settlement, especially if you're facing long-term uncertainty after a crash in North Tempe or Escalante. These include:
Steady income over time to cover ongoing medical costs or living expenses
Tax advantages (many structured settlement payments are tax-free)
Reduced risk of spending the entire amount too quickly
Customizability to match future needs, such as college tuition or home modifications
This kind of structure can be especially helpful in cases involving lost earning capacity, where a one-time payout may not stretch over the years or decades of reduced income.
How Are Structured Settlements Set Up?
Once your claim settles, your attorney and the insurance company’s financial representative will work with an annuity provider to establish the structure. Payments can be customized to fit your needs. For example, you might choose:
Monthly payments to replace lost wages
Annual lump sums for ongoing care
Larger payouts at specific life milestones (e.g., turning 25, finishing rehab)
Structured settlements are often used after serious injury crashes in South Tempe and Meyer Park, where full recovery is uncertain or the injury will last a lifetime.
Can You Combine a Lump Sum and Structured Payments?
Yes. Many structured settlements start with an initial lump sum to cover immediate needs—such as medical bills, vehicle replacement, or home modifications—and then shift to monthly or annual payments.
This hybrid approach is popular in cases involving rideshare accidents or hit-and-run crashes, where victims often face immediate expenses followed by a long recovery timeline.
Are Structured Settlements Always a Good Idea?
Not always. While structured settlements offer consistency and safety, they also come with trade-offs:
No flexibility once set up—you can’t speed up or change payment terms later
No investment control—the money is tied to the annuity, not managed by you
Potential inflation impact—fixed payments may lose value over time
This can be an issue for younger crash victims in Downtown Tempe who may later want access to capital for education, business, or property. In these cases, a lump sum may provide more freedom—if carefully managed.
What Happens If the Victim Is a Minor?
Structured settlements are commonly used for children injured in car accidents. Because minors can’t legally manage large sums of money, a court may require a structured settlement. Payments typically begin when the child turns 18, or earlier in special cases.
We’ve helped families in Holdeman and Tempe pedestrian crash cases secure structured settlements that cover therapy, adaptive equipment, and long-term support for injured children.
What If You Change Your Mind Later?
Once finalized, structured settlements are locked in. You cannot change the payout schedule or cash it out early unless the contract allows it—which is rare. Some third-party companies offer to “buy out” structured settlements, but they do so at a steep discount.
That’s why it’s critical to work with an experienced attorney who can project your real future needs and negotiate the right payment structure from the start.
What Happens to the Payments If You Die?
This depends on how the settlement is structured. Some plans include guaranteed payout periods, where payments continue to your beneficiaries even if you pass away. Others end with the recipient’s death. These terms are negotiated before the structure is finalized, and we always help clients plan with their families in mind.
Should You Choose a Structured Settlement?
That depends on your age, injury, recovery outlook, and financial discipline. If your crash resulted in permanent limitations—such as in a paralysis case or TBI—a structured settlement can help ensure steady income for the rest of your life.
But if you're financially savvy, prefer investment control, or expect changing needs, a lump sum or hybrid option may offer more freedom. Every case is different, and our job is to make sure your settlement works for your future—not just today.
Final Thoughts: Choose the Right Structure for Your Recovery
A car accident can change everything in a matter of seconds—but your settlement should be built to support you for years. Whether you live in Tempe, Chandler, or Mesa, a structured settlement may be your best option for long-term peace of mind—if it’s done right.
To explore your options or learn more about how structured settlements fit into your injury claim, visit our legal resources or contact us for a free case consultation.
