Why You Should Get Your Personal Injury Settlement In The Form Of Structured Settlements
If you are expecting a significant amount of money as your personal injury settlement, why not get it in the form of structured settlement? Such an arrangement allows the insurer to pay your compensation in regular installments spread over a number of years. Some of the reasons you should consider structured settlement include:
Controlled Spending
For many people not used to huge sums of money, getting a huge lump sum may be both a cursing and a blessing. It is easy to spend the money too fast that you are left with nothing for the remainder of your life. To make matters worse, huge settlements often result from severe injuries, which mean you are likely to be disabled and penniless.
To prevent you from relying on Uncle Sam for the rest of your life (via disability benefits), get your settlement in the form of structured payments. That way you only spend what you get per given year.
Professional Management
When you get a lump sum, you are at liberty to manage it on your own or let someone handle its investments. Unless you are a financial professional, choosing to invest the money as you please expose it to many risks, and you can lose most of it in a short while. Those who choose structured payments don't have this risk because annuities must be managed by professionals.
Guaranteed Future Payments
Your annuities are guaranteed to be there when you need the money, on your agreed schedule. This means that you can plan for it without worrying about any potential default. In fact, even if the insurer handling your annuities go bankrupt, you still get your cash? How is this possible? The money is guaranteed because each state has insurance laws that guarantee these payments.
Of course, there are some drawbacks of structured settlements that you need to be aware of; the biggest drawback is:
Secrecy from Insurance Companies
Annuities must be purchased, and the insurance company paying your settlement award is the one who bears the purchase price. Your lawyer can negotiate a better deal for you if he or she knows what this figure is. However, insurers are usually unwilling to disclose this fee to defense lawyers.
If you are expecting a huge settlement award, then talk to your lawyer (such as one found by clicking here: accident attorney baton rouge, la) about this method of settlement. It may also be prudent to involve financial professionals to help you understand all about annuities. In the end, however, it is your decision to choose a lump sum or annuity payments.
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