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Is A Structured Settlement the Right Choice for You?

Mar 24, 2008
More and more people are choosing structured settlements these days. Most common are those who have been injured in a road accident and need money from his/her settlement immediately to pay for medical bills, and prefer to have it now than wait for a large sum of money that may come later.

You should carefully weigh the pros and cons before you decide on whether you should opt for a structured settlement. If you need money for recurring medical expenses on account of your injury or anticipate prolonged physical therapy in order to recuperate, then a structured settlement might be a good idea.

The payment of a structured settlement usually comes from interest accruing on a purchased annuity. Although the terms of the settlement are quite loose, it is a binding one. Once you have signed the agreement, no more changes will be allowed at this point. Should you feel the need later to revise or make changes to the agreement because of some unforeseen expenses, you will need an attorney to change the terms of your agreement. You cannot use your structured settlement to obtain a new loan either.

Because of the investment potential, there are companies that will buy the rights to your structured settlement for a lump sum pf cash. Usually, what you will receive will be the current day value of your settlement amount but excluding the invested sum. Different states have different rules regarding structured settlements and there are also some states where the amount received from such settlements are taxable.

If you are consulting an attorney to help you with your structured settlement, be sure you fully assess your situation and requirements carefully. Some things to consider before making a decision are:

What are the advantages and disadvantages of the program? Does the lawyer have a track record in negotiating structured settlements? Which is best for your own situation, a structured settlement or a lump sum of money? Will there be any tax benefit if you opt for a structured settlement? Will you get adequate money on time to cover all your expenses? How is it going to be in case of future contingencies, and if your requirement for money increases? Is it possible to change the terms of the structured settlement later? Can you decide later to change the program and opt for a lump sum payment?

It is a good idea to have a list of questions ready before you speak to an attorney. The questions should be specific and pertinent. Once you meet the attorneys you will be able to judge their experience and expertise in dealing with such matters. Be sure that your attorney has your best interest at heart, and if in doubt, get a second opinion or consult with your own financial planner.

After you have had all your questions answered, you can already make an informed decision. Remember that this is a very important decision to make, as it will affect not only your future but your family's as well. So enter into an agreement only if you are completely sure that you have made the right decision.
About the Author
Want to know more about structured settlements? Check out www.allaboutstructuredsettlements.com and read more about the advantages of structured settlements and other related topics.
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