Structured Settlement | Lump-Sum Settlement | Annuity

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Structured Settlement Benefits

Structured settlements are designed to provide a steady stream of income over a long period of time. This time can vary from a few years to a lifetime. A benefit to receiving a structured settlement over a lump sum settlement is that a steady flow of income is divided up for you during the structured annuities allocated time period. If bad investments are made with a lump sum settlement, then it will be difficult to spread it out over several years.

A structured settlement is tax free through federal and state levels during its payout periods, but a lump sum settlement payout that is invested is not tax free. As stated before, a few bad investments could mean a lump sum settlement will not last the duration of a lifetime. A million dollars in an account looks like it could last forever but after medical expenses and daily living expenses this lump sum settlement may not last nearly as long as a structure settlement annuity would.

The second benefit to a structured settlement is the vulture factor. Many individuals prey upon elderly people who have a lump sum of cash. A lump sum settlement can be dangerous if precautions are not taken to protect a loved one. With a structured settlement this factor will not come into play. A fixed income will provide a worry free atmosphere for the individual receiving the periodic payments.

The third benefit to a structured settlement is the expense for the defendant. Many defendants will settle outside of court to avoid the large attorney fee's usually created by an ongoing court battle. The argument is that the defendant could win the case. This is true, but the defendant could also come out much further behind than if they just settled outside of court with a structured annuity.

The benefits of a structured settlement listed above are not the only benefits of a structured settlement. This article is meant to outline the important facts of a structured settlement.

Settlement Quotes does not create structured settlements. We are a structured settlement factoring company. Financial times change for different people at different times, we provide a service to cash out a structured settlement, offering a lump sum in return for those future payments. There are many reasons to use this option, but it is not recommended from Settlement Quotes to use this financial route if it is not needed.