What's a Structured Settlement? A Structured Settlement is a kind of settlement where you get regular payments that are "structured." In other words, it's a way to pay for something where you don't get a large sum all at once but rather smaller amounts over time. These increments happen every week, month, or year. People often say that these settlements are a "win-win" because the person paying has to come up with a lot less money up front and the person getting paid has a steady stream of money coming in all the time. This process is also known as "annuity." When do you use a structured settlement? Structured Settlements often involve, but are not limited to, the following:
Lottery Prizes: If you win the lottery, you can sometimes choose to get a bunch of smaller payments instead of one big one.
Malpractice Cases: If a family member dies or becomes disabled because of medical negligence, the party may be able to get a structured settlement over the victim's lifetime or as a "grievance payment." These payments don't make things better, but they are meant to help the victims and their families get by a little bit better.
Insurance Cases: This type of settlement is often used in insurance cases. This is because it is easier to make smaller payments over a longer period of time, and the damage may be easier to fix over time. It's important to understand these ideas if you want to manage your money well. Also, it is important to know how money changes over time. The value of the dollar is likely to go down over long periods of time. This means that if someone got $1000 a month for 20 years, that $1000 could only be worth $500 at the end of the 20 years. This is one reason why some people decide to sell their structured settlement for a large lump sum. There are many reasons why someone might want to sell their structured settlement. The first reason could be that they need more money right away because of something they need right now. Getting a new car or house is a good example of this. People also decide to sell because they want to put the money into something that gains equity over time and goes up in value instead of going down. Some people want to fight inflation by taking the monthly payments and putting them back into the stock market. Most of the time, this is the better choice between the two. Almost always, you should do your research before selling your structured settlement or annuity. Don't sell to the first person who offers the most money. Before you do anything, you should find out what your choices are. First, you should talk to a broker, a financial advisor, and a lawyer. By doing this, you can protect yourself from con artists and transactions that aren't honest. Always choose the safest option. Selling an annuity can be risky, so you should always move slowly and steadily.