Los Angeles Claims Adjuster Property and Causality Practice Exam

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Which type of settlement allows part of the amount to be paid as a lump sum?

Semi-structured Settlement
Full Release Settlement
Structured Settlement
Scheduled Payment Release

The correct answer is: Structured Settlement

A structured settlement is designed to provide long-term financial security by breaking up the settlement amount into periodic payments. However, it can also include a provision where a portion of the total amount is disbursed as a lump sum at the outset. This flexibility is often beneficial for a claimant who may need immediate funds for pressing expenses, while the remaining balance is paid out over time to ensure ongoing financial support. In contrast, other types of settlements typically do not offer this combination. A semi-structured settlement often does not incorporate a lump sum payment, and a full release settlement generally involves a complete payment upfront without future installments. Scheduled payment release refers to structured payments that are predefined but may lack the immediate cash benefit of a lump sum. Such distinctions highlight why a structured settlement is particularly valuable for individuals seeking both immediate and long-term financial solutions.