When you compare the value of a lump sum payment versus regular payments, it’s easy to see that a lump sum will always be a better choice. However, payments are not always going to be the best decision. There are so many benefits and drawbacks attached to these kinds of investments. One of the biggest advantages to getting a lump sum now is that you’ll have a huge amount of money that can be used immediately to pay bills, vacation expenses, etc… Without having to save that money for later. However, there are also some major disadvantages to getting a lump sum.

One of the big disadvantages of lump sum versus payments is the fact that annuities are a product that comes with fees. In fact, you could very well end up paying thousands of dollars in fees just for taking advantage of this investment. Many people don’t like the idea of paying out money to an insurance company for a product that they are purchasing. They are more comfortable letting someone else do this.

When comparing lump sum versus payments you should look at the difference between immediate payment and future value. With annuities, you get your money today, but with an annuity you are getting a monthly payment that will be made over time. This means that the amount you receive in one lump sum will be divided up into monthly payments until the full amount has been received. As long as the annuitant makes his or her monthly payments on time, then the investor will receive all of the annuity’s full value. The downside to this is that if the person dies before the full value of the annuity has been received the estate will not be entitled to any of the investor’s money.

One way that lump sum versus payments can be more advantageous than other options is through the use of a stipulated finding. A stipulated finding is a finding which outlines how much money the insurance company must pay out over time. The stipulated finding is usually based on a percentage of the total amount of the annuity. The insurance company can also agree to make payments equal to a predetermined amount of time. This type of finding is usually used when the lump sum would greatly exceed the cost of maintaining the insurance.

Prior, to deciding whether or not to invest in a lump sum versus payments there are several factors that should be taken into consideration. The first of these factors is the tax rate that the investor will be faced with. It is possible that the tax rate will be substantially less with a lump sum than it would be with future payments. This can be important because if the value of the investment at the time of investment exceeds the amount of taxes that would be owed at the end of the year then the investor will be left with an asset that is much more valuable in terms of what it could potentially earn. Another thing to consider is the likelihood of growth of the value of the asset in question.

Lump Sum Versus Payments has many advantages to it but some of them hinge upon the reason that the annuitant intends to sell the annuity. If it is for personal reasons such as paying off credit card debt or buying a new home then there is little to no disadvantageous to investing in a lump sum versus payments. However, if the reason is more business related than the value of the future annuity payments will be a large determining factor in whether or not the investor takes this route. The tax implications may be something else to consider. It is possible that future payments will have to be made at a higher tax rate than the regular annuity because of the lump sum that was received.