What is a Structured Settlement?
A structured settlement is a powerful financial tool made exclusively for injured people. After winning a personal injury lawsuit, you can either receive a lump sum payment or a structured settlement, where you’re provided with regular, tax-free payments over a long period of time. Instead of having to deal with the unexpected stress and difficult decisions you have to face when handed a lump sum of money. Structured settlements are the safest and the most logical (economically speaking) way to go.
Why should I choose a Structured Settlement
over a Lump Sum Payment?
Minor and moderate personal injury cases are usually settled with lump sum payments to the injured individual. But when you’re dealing with serious/permanent injuries, structured settlements are becoming increasingly popular. This is because, with these types of injuries, there might be a lifetime of medical bills that need to be dealt with.
The main reason Congress created structured settlements was the concern that injured people who take a lump sum often spend it all before meeting future obligations. However, it’s actually possible to sell structured settlement for a lump sum of money! And it’s easier than you’d think, all you have to do is to get help from one of the reputable structured settlement companies.
Structured settlements might be right for you if you’re looking for the following things:
- Tax-Free Income: Unlike lump sum payments, structured settlements are devoid of tax. Since most structured settlements come in the form of an annuity, sold by third parties like insurance companies, they are completely tax-free at the state and the federal level. This is great news for you. The sum itself is tax-free but you will be taxed on the proceeds of any investment you choose to make with the sum.
- Flexibility: Structured settlements can cater to your individual needs. You can structure the payments according to your bills and the expenses you have to deal with later in life. Do you have a big expense coming up in a few years? You can opt for smaller payments now, a larger sum a year from now, and then return to small payments for the balance.
The biggest downside that comes with structured settlements is that once you agree to a structured settlement and "sign on the dotted line," there is no way to change it. The payment amount, frequency, payment schedule are all fixed and so is everything else about the settlement. But life is unpredictable, and sometimes you might suddenly need a large sum of money to buy a new home or start a new business. Before you start wishing you’d gone for the lump sum payment option, we would like to tell you that our experts are here to make it possible for you.
Washington Accord can be your trusted partner for your most important financial decisions in your life. We always have our customers' best interest in mind. Call us and find out how we can help you meet your needs.