29 Jul Are Structured Settlement Payments All They’re Cracked Up to Be?
For individuals involved in civil lawsuits, it’s exceedingly common to receive a settlement. In fact, anywhere from 80 to 92% of lawsuits end in settlements, with more than 90% of cases that go to trial ending in a victory for the person who brought the suit.
Typically, these settlements are awarded to individuals via structured settlement payments, which are regular payments over a determined period of years rather than a lump sum of money all at once.
When structured settlement payments are such a common occurrence in legal settlements today, it’s important to understand what they are — and to know whether or not you’d be better off selling these payments to get your settlement cash now. To better understand whether or not your structured settlement annuity benefits are right for your financial needs, take a look at these pros and cons of structured settlements:
Pro: Structured settlements provide a steady source of income
Because structured settlements are paid over the course of several years, many people enjoy using this money to supplement their incomes. When employee lawsuits, for example, pay an average of $150,000 to the victors, this money can be a great long-term source of income. This is especially true for individuals who are nearing retirement.
Con: With structured settlements, it’s impossible to prepare for financial emergencies
Many people decide that structured settlements aren’t for them because these payments don’t allow one to pay off large amounts of debt, make large investments or make major purchases. In such instances, a lump sum is more attractive — and if this sounds like a situation in which you can see yourself, it might be wiser to seek cash for your structured settlement.
Pro: Structured settlements make it impossible to overspend
Another reason why people sometimes prefer structured settlements? Because you only get a small amount of your settlement money at a time, it’s impossible to spend all your money in one place. You’re essentially forced to develop smart spending habits.
Con: Structured settlements aren’t flexible
If you have structured settlements, there’s no way to take out more money from your settlement early if you need it. For this reason, many people decide to sell their structured settlements in exchange for a lump sum, offering financial flexibility.
Have any other questions about whether you should get cash for your structured settlement payments? Feel free to ask by leaving a comment below.