Most often a lawsuit will end with one side having to pay out a particular money amount to the other. With that comes two options of how the schedule of payment will work.
We may recognize the term but it is important to really understand what structured settlements are, how they work, and how they differ from a lump sum. Those details are illustrated below.
How A Structured Settlement Works
This is generally a four-step process;
Advantages of Structured Settlements
While, yes, a lump sum payment will allow access to the entire amount of money owed at once there are a large number of benefits that come when a structured settlement is chosen.
Generally, they are the better choice of the two when dealing with larger amounts of payouts as well.
Before the more detailed technical aspects are reviewed the first benefit for many is how the settlements are paid out. Rather than receiving all of the money at once, the payout over time ensures there will be no here one day gone the next.
Selling My Structured Settlement
While a structured settlement is, by design, established to pay out over an extended period of time, there are options should an individual’s situation change.
Companies will buy out your annuity settlement and your structured settlement but it isn’t just that simple.
The financial impact is a tricky one and not as clear as someone without proper advising would like. A pressing need for immediate cash flow might make this payout seem enticing but in the end, make it cost more than you know
Either Way, The Money is Yours
Each type of settlement has its pros and cons and its place. Knowing how structured settlements work and what the benefits of them you can more easily make your decision.
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