What does a cash structured settlement look like? Basically, a cash structured settlement is when an insurance company pays a person in instalments over time after a claim has been settled. In other words, a structured settlement is a set of money that lets a settlement be paid off in scheduled payments over a period of time.
Structured settlements were first used in Canada at the beginning of the 1970s. They quickly caught on in the United States. A few years later, this method spread to both Europe and Australia.
One good thing about structured settlements is that they give you tax-free payments over time. These payments can be spread out over the life of the person who gets them. If the person who gets the settlement dies, a guaranteed part of the money can be given to a beneficiary.
A lump sum payment can be used instead of a structured settlement. This basically means that the money will be given to the person all at once instead of in several payments over a certain amount of time. When someone wins the lottery, this is often the case. People may be interested in lump sum payments because they want to pay off a big bill or because they want to save money. For example, a home loan or mortgage, medical expenses, credit card debt, etc. With a lump sum payment, many debt problems can be taken care of at once.
Some people may prefer lump sum payments, but structured settlements provide a steady stream of income over a set period of time.
