Lump Sum Settlements For Structured Settlements

Lump Sum Structured Settlement - Set Your Money Free

You can benefit from a lump sum structured settlement if your financial situation needs a helping hand. After all, why should you take more loans to cover your debts when you can use your own money?

Cut To The Chase
There is a lot of complicated and erroneous information out there regarding buying out annuities. This is because there are tax clauses and legal matters that need to be considered when selling. Apart from that, the entire process needs to go through the courts and be approved before the sale can go through.

So if you really need cash for structured settlement, then you should start as soon as possible. You can get the ball rolling right now by following the link to get a profitable quote on your annuities.

Some people do prefer the installment method of payment to getting a lump structured settlement. This is mainly because getting a monthly check gives you a sense of financial stability.

If your money matters are in good shape, this kind of payment option makes a lot of sense. But what if you are basically living from paycheck to paycheck? What if you have an endless stream of debts and loan payments to make?

In these cases, getting a lump sum structured settlement makes much more sense. Rather than relying on each installment, you can get the entire amount as a lump sum. This puts you in complete control of your money and you can start fixing your finances immediately. You can clear off debts, mortgage payments and loans. You can even start investing to build a solid financial foundation for your future.

A lump sum structured settlement can make a huge difference to your money and your lifestyle. If you don\'t want to cash in your entire settlement, you can always choose to sell a portion of it.

Once the installments for that amount have been covered, your monthly checks will start coming in again. This is a good alternative for people who are interested in making some short term investments.

Selling your settlement allows you to deal with your financial problems without incurring any extra debts. With the right kind of money planning, you can use the capital to make a fresh start. A lump sum structured settlement is the first step to financial freedom.

Get Lump Sum Payments for Annuities and Structured Insurance Settlements.

If you are receiving regular monthly payments from an annuity or a personal injury claim settlement or a lottery win and need QUICK CASH RIGHT NOW for virtually any purpose, there are companies who are willing to give you a lump sum payment in exchange for your monthly payments.

This could be the perfect solution for you if you are trying to raise cash for a down payment on a home or starting a new business or paying off those expensive credit card or medical bills.

What is a Structured Settlement... and How Can I Exchange the Periodic Payments I'm Receiving for a Lump Sum of Cash Right Now?

If you were the plaintiff in a personal injury suit, you may have received and accepted an offer from the defendant's attorney to 'settle' for periodic payments over a number of years instead of a lump sum settlement. This is what is called a "structured settlement". Structured settlements can provide you with a predictable and steady stream of income over a period of time which can vary from a few years to a lifetime.

My personal injury attorney is encouraging me to take a structured settlement rather than a lump sum for a permanent injury. What is a structured settlement and why might it be better for me than a lump sum payment?
Most minor to moderate injury cases are settled with a lump sum payment to the injured party. More serious injuries, however, including those that require future treatment, or those resulting in permanent disability, are often settled with what is referred to as a "structured settlement".

You do have a choice. A structured settlement is a tool that is used to compensate the injured person with a moderate to large amount of money by way of payments over a long period of time rather than one large payment all at once. More and more claimants are choosing structured settlements.

Popularity of Structured Settlements

Tax Free Income

Most structured settlements come in the form of an annuity, which is sold by a third party, often, a life insurance company. Sometimes they are invested in U.S. Treasury Securities. Annuities (and treasury securities) grow the money, but are completely tax-free both at the state and federal levels. They actually work to expand the size of your total recovery. Not so with a lump sum of cash. The sum itself is tax-free, but for any investment you make, the proceeds (dividends, interest) will be taxed by both your state and the federal government. Over time, you will end up with more money if you take a structure, than if you take a lump sum. (See example below)

Flexibility

In addition, structured settlements can be very flexible. Suppose you have some large medical bills that need to be paid right away. You can structure your annuity to pay the bills directly or pay a large sum to you up front to cover the bills, with the balance of the money paid out to you over a set number of years (Designated Period Annuity) or for the rest of your life (Life Annuity). Or, if you know you have a large expense coming up in a year or two, you can design it so that you get small payments now, a larger sum a year from now, and then return to small payments for the balance.

There are many different options. Structured settlements are a low risk way of investing your money (many are government insured) and the payments are predictable--no surprises.

What’s the downside?

Probably the biggest negative is that once you agree to a structured settlement and "sign on the dotted line," there is no way to change it. You cannot decide down the road that instead of payments, you want all the money. You cannot change the payment schedule, the amounts per payment, the frequency, the term, or anything else about the settlement. Additionally, if you want the annuity that is paying those predictable payments to somehow keep up with inflation and give you a cost of living increase from time to time, it will not, unless that was built into the payment schedule at the outset with a specific figure.

As indicated above, structures are low risk, but they are not risk-free. If the entity responsible for making the payments goes belly-up, there is the potential risk of losing the unpaid balance of your money. One other important factor is that unless the funds, as you receive them, are placed in a qualifying protective vehicle, such as a custodial account, you could be barred from receiving certain public benefits down the road, like Medicare and Medicaid. (Consult an accountant or a financial advisor for this information.)

Example

Suppose you have to make a choice between a structured settlement and a lump sum. Notice the difference in the total after 10 years. These figures are just examples and are hypothetical and unrelated to any particular settlement or case.

Lump Sum of $75,000

$25,000 fee to attorney

$20,000 paid to medical providers.

Of the $30,000 left, you put $10,000 in your checking account, which earns no interest, and $20,000 in your money market account, which is paying 5% interest.

If the interest is compounded daily, you will have $20, 524 after a year

After 10 years, you will have about $33,000

You will pay taxes on the dividends in an amount that is determined by your tax bracket.

Structured Settlement

Your attorney is paid his fee up front by the insurance co.

Your medical bills are paid up front by the insurance co.

The insurance company offers to purchase an annuity for 25,000

The structure you agree to provides you with payments of $600 a month for the next 10 years (total of $72,000)

You pay no taxes on this income.