Should You Choose A Structured Settlement Or Lump-Sum Payment After A Personal Injury Case?
If you are involved in a personal injury lawsuit, you may be faced with choosing between a structured settlement and a lump sum to receive your compensation. A structured settlement involves annuities and an insurance company. You will receive specific payments over a period of time.
If you choose a lump sum, you will be given the whole of the settlement at once. There are benefits to both, and you must decide which is better for you and your family:
Structured Settlement
Here are the benefits of choosing a structured payment to receive your compensation:
- When you choose a structured settlement, you have the ability to set up how you will be paid. Choose how much, how often and for how long your payments will be. You may also decide if there should be periodic increases in the amount you receive.
- You cannot spend all the money at once. It can be very tempting to go on a spending spree when you receive a large settlement lump sum. With a structured settlement, you can be sure of your financial security for the rest of your life.
- While the principle of your compensation is not taxable, the interest you earn on it is. When you are only receiving a portion of the settlement annually, your tax debt is not as large as if you took the whole thing all at once.
Lump Sum Payment
If you prefer to have these benefits, choose a lump sum and receive all the money at once.
- You are in charge of all your money. There is no need to wait to use it. If an emergency arises, the funds are there and not tied up in a structured settlement.
- You can pay off all your debts at once, often taking advantage of discounts for doing so.
- If you have dreams of starting a business or owning a home that you have not been able to achieve due to financial problems, you can do so now.
Something to consider when deciding between a lump sum and structured settlement is the total amount you will receive. If the settlement is going to be very large, the payments on a structured settlement can be enough to provide for you and your family for many years. However, if the amount is not large enough for that, taking a lump sum can take care of any financial issues you may have and buy you a home. This will allow you to live comfortably even with a modest income. You decide which suites your needs better.
To learn more, contact a company such as myLumpsum.com with any questions or concerns you have.
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