Choosing Between a Lump Sum or Structured Settlement Payments

Cash for structured settlements

The majority of personal injury cases result in the payment of compensatory damages to the plaintiff, to reimburse him or her for things like pain and suffering, medical expenses, lost wages, and loss of ability to work. These sums are usually funneled to the injured party using a structured settlement through an annuity. More than a third of people who file personal injury claims are offered a settlement, but there are two different ways to receive the structured settlement money.

Annuity Lump Sum Payments
One of the ways to receive structured settlement cash is in one large lump sum. The main benefit of choosing this option is that it provides the injured person with a large amount of money, which he or she may need to cover expenses right away — like unpaid bills or other consequences of not being able to work. Additionally, if there are any other large expenses happening at the time of the settlement (like sending a child to college), choosing the lump sum might be more appropriate.

Annuity Structured Settlement Payments
The other main option for receiving structured settlement cash is to opt for payments. These are paid out in smaller, even increments over a period of time. The length of the pay out could be over a number of years, and the payments could be made monthly or annually. This option is better for people who are unable to work or who have no other sources of income to cover their living expenses. This is also a good option for people who feel that they would not be able to manage a large sum of money at once.

Which of these options is right for an individual depends mostly on his or her sources of income and what his or her current financial situation is. Do you have any questions about these methods structured settlement cash is paid out in? Feel free to ask us in the comments section below. Find out more about this topic here.

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