Why do insurance companies pay structured settlements instead of a lump sum?
Structured settlements were set up to protect you as a personal injury victim, annuity beneficiary, or pension plan owner. They help to manage your money so there is less danger of you spending an entire lump sum before it has a chance to do you the good it was setup to do, such as pay medical expenses/procedures and monthly bills.
In addition, in order for the money to be tax free, it must be proven to be mostly out of your control. In fact, the more control you have over that money, the more likely it is that you would need to pay taxes on it. There are a number of reasons why you may want to opt for a lump sum rather than a structured settlement, and you can find additional help for that dilemma on this website.