Look, I might just be a law student, but the truth is that I get a lot of questions about what I think about some hot topic law issues. If you’re not sure what I’m talking about today, I’m going to get to the point — there’s a trend in personal injury cases lately. There’s nothing wrong with personal injury, and I fully believe in the system. If you’re injured and it’s not your fault, you SHOULD be seeking compensation. This might sound shameful to people who have an issue with money anyway, but it’s important to also know where you’re headed and what’s actually aimed at helping you.
The term structured settlement comes up quite often, and it leaves a lot of people trying to figure out what’s it all about. There’s nothing to fear when you’re armed with the right information but it’s the getting there that really matters.
In short, structured settlement is really just a contract under which an insurance company undertakes to make regular payments to an injured party. They are usually done where the amount of the settlement is known ahead of time and everything is set up. You get to enjoy the money before the case is officially closed, which is never a bad thing. If you’re in the middle of a personal injury case, then you already know that your bills are going to keep going There’s nothing that says that you have to let your current household sink into financial ruin just because you have to deal with a personal injury case. It’s better to make sure that you have things together. Sometimes you might have to wait for the case to get settled fully, but it means that you will get your payments well ahead of schedule because you’ve agreed to have your payments done over a lifetime.
The benefit here is that the money can be made tax-free over a pre-determined amount of time. Even if it’s set into an annuity and you pass away, your heirs will still be able to get the money continued. It all depends on the agreement that is set into motion.
Are there times where you might want to get a lump sum? Sure there are. If you want to go ahead and pay off a mortgage or buy a whole new home, you might not be able to just do small payments. You might have to go ahead and get that lump sum.
Settlement contracts can be sold to a financial institution that will accept the payments on your behalf and then give you a lump sum. There is usually a handling fee which is based on interest charge and other associated issues. The one off payment is usually less than what would have been paid out.
You might want to stick to the usual arrangement when it comes to structured settlements, as you will not have to face so many charges. If you’re someone young that is getting a settlement, you will generally get a lot more money going for the payments over a lifetime than the lump sum. Of course, every situation is definitely different so look at the details that matter to you before you take anyone’s word over your own. Thinking about it a few times will help you keep form making the wrong decision.
Good luck with whatever choice that you decide to make. It’s a good day when we get some money — but it’s hard to move past a personal injury case. You feel haunted by it. Let it go, relax, and move on with life. Don’t get caught up in the accident that changed your life. It can only change your life if you really want to get pulled into it on that level. Good luck!