A structured settlement is a financial offer usually expected as a result of a personal injury claim. It is provided to adjust for the damages and costs that the victim has faced. And it is similar to a compensation for the pain and distress that he/she went through.
When you success in a case, you can select between two kinds of settlements offers:
- Lump-sum (All the money at once).
- Structured settlements (Sequences of payments over time, generally it’s monthly).
Though the giant cash offer looks tempting, it is not recommended in most cases. Because the plaintiff may overspend the sum or lose all of it as a consequence of a bad decision. You should also be worried about the tax that you may have to pay on this huge amount. So is better to say NO to this temptation.
Quite the opposite, the choice of structured settlements is better for both the insurance company and the casualty. It supports to control the expenditures of the plaintiff and contains benefits for personal injury victims. Furthermore, the insurance company does not drop the whole amount at once and has time to slowly pay the settlement cash to the victim.
Many people have a preference to sell all of it. You can as well sell a few settlements that will cover your desires and at the end of the day you can get the rest of it at once.
Well, next are the pros and cons that you need to think through before selling your structured settlements:
The paybacks of selling your structured settlements:
- Weekly lump-sum instead of years.
- Pay off your credits (If any).
- Invest and produce better interest.
Now, have an expression of the disadvantages:
- Can become penniless by losing all of money.
- You will be unable to recover almost 10% of the total value.
- You will lose all the insurance covers with the sale.
- The amount can be taxed, but structured settlement isn’t.
Finally, before you jump to any assumptions, get advice from a finance expert who will lead you better with your decisions. And if you choose to sell it, then go for it. But be watchful where you spend the money. Benjamin Franklin believed, “Be careful of little expenditures. A small leakage can sink a huge ship.”
Article by: Jeffery Barnes
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