Structured Settlements Versus Lump Sums The Realities


Selling your annuity

So you?ve ended up with a settlement ? a structured settlement, for that matter. If you?re regretting it and thinking about the ?getting cash for structured settlement? option, you aren?t alone. Cash for structured settlements is an option often offered; and people choose it for many reasons. But it?s understandable if you?re hesitating, too. After all, this is a lot of money you?re making a decision about. So before that decision is officially made, let?s look at the different options available and think about what?s right for you. You may be surprised by what you learn about the truth behind why people choose to get cash for settlments.

What Really Is A Structured Settlement?

It?s time to get one thing out of the way first: what is a structured settlement, in actuality? Often, those who have structured settlements realize that they still don?t really know what it is! With the majority of cases settling ? some estimates putting that number at 80 to 92% — structured settlements are often offered to those who?ve been injured and receive a large amount of money. While an employee lawsuit averages at a $150,000 settlement, medical malpractice settlements in total paid out $3.6 billion in 2013. Structured settlements give this money to the claimant in fixed amounts annually. So, what?s the issue here? Why do people choose the getting cash for structured settlement option over just taking that money annually?

The Drawbacks Of A Structured Settlement

The reason why the getting cash for structured settlement option is becoming more popular is due to the many inconveniences behind having a structured settlement over the course of years. Companies that offer to buy structured settlements are essentially giving a lump sum payout in favor of keeping that money tied up for years. You get the full amount that you ?won? by this model, rather than waiting for it. There are often penalties that come with withdrawing money early, and complicated tax issues that many don?t want to deal with. Keeping money in a structured settlement is just complicated, and there may come a time when you?ll need the money that you have in that settlement.

The Pros Of Selling A Structured Settlement

The most obvious pro behind selling a structured settlement is that you get your money right there and then! That money is usable whenever you want it to be, and your life becomes a lot simpler. If anything should happen that needs to be paid for immediately ? a medical emergency, for example ? you have the money right then, and don?t have to worry about being penalized for spending your money.

The choice, obviously, is yours. But the fact is that one option is simple, while the other is somewhat complicated. The cash for settlement option lets you have complete control of your money, while the structured settlement option does, in some sense, ?tie it up?. For many, the choice would be clear in that sense alone.

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