Structured Settlement Advantages
While most websites deal with the advantages of selling your structured settlement for a lump sum payout, there are actually advantages to maintaining a payment schedule. For one, a structured settlement usually involves an annuity purchased through an insurance company, which guarantees you will receive regular payments for the life of your settlement. Agreeing to a settlement also offers you protection under a tax umbrella, which will ensure the money you receive is not devoured by state and federal tax.
While some would say that a structured settlement is to the advantage of the defendant who is trying to avoid excessive court costs and attorney fees. In reality, a settlement may offer the plaintiff a greater compensation package, because the court costs expected to be paid by the defendant will be transferred to the plaintiff in return for settling out of court.
A structured settlement offers a safety net for those who are afraid they might be tempted to spend the entire lump sum payment at once, leaving little to pay for needed medical and living expenses. Under circumstances of underage recipients, a structured settlement is often the only choice that is available. You also have the freedom to sell a portion of your remaining payments for a lump sum payment, using a qualified structured settlement buyer. Remaining payments can be sold for any length of time, allowing you to customize how many payments you want to trade, with the option to resume payments at a later date.
Structured settlements (annuities) are also one of the safest means of planning for the future, as you will not have to concern yourself with investment strategies or financial risk. Despite the fact that many investors will tell you that inflation will decrease your ability to compound interest while receiving deferred payments. If you invest the majority of your earnings at a moderate interest rate for a period of over 20 years, you can nearly double your original lump sum, which is a decent return for any secure investment.
There are both advantages and disadvantages to keeping or selling a structured settlement. Please contact us if you would like to evaluate your best options. Also refer to our structured settlement calculator so that may get an idea of what selling your structured settlement might be worth so you can be better informed when making a decision.