A Guide to Structured Settlements

Although a common occurrence, most people have no idea what structured settlements are. That's our focus in this article, to go over the definition of structured settlements, who they can benefit, and how to make them work for you.

People are awarded settlements for all kinds of reasons. In might be from an insurance company, or from a claim won in a court of law, due to negligence or discrimination, for example. Whatever the case, the claim that is awarded to you can be received a number of different ways.

Commonly, people think your sum is awarded in one large payment. This is often a smart way to take your settlement, if it is small, like $10,000 or less. But for much larger sums, there are many different alternatives you should at least consider.

Oftentimes it is not wise to take a large chunk of money all at once. Taxes on large sums of money may drive you crazy. But more importantly, most people will mismanage large chunks of money if they've never had them before.

There are other reasons, then the two above, why you should consider not taking your settlement in one sum. Your alternative is to set up what's called a structured settlement.

With a structured settlement, your offer the option of being paid your settlement in installments, over a certain length of time. You can even create the payments to cover you the rest of your life, if your damage will affect you for the rest of your life. This way you know you will have a guaranteed source of income every month.

Not all structured settlements have to be divided equally into payments. For example, you can choose to receive a certain portion of your settlement up front, and then set the rest up to be paid in installments. This is ideal for people who have a large debt that they want to take care of upfront, and still have a monthly payment received from their settlement.

Structured settlements also take inflation into consideration, when they are set up. This is to make sure that you get the same buying power from your payment installments 10 years from now, as you're getting today.

To sum it up, these are your options that are involved when being awarded a large sum and setting up a structured settlement. Compare this to receiving your money all at once. It might just be more wise for you to set up a structured settlement.

By: Steven Ross

Author Steven Ross is a long-time Structured Settlement enthusiast and can help you with all your Structured Settlement questions. For Structured Settlement advice visit his new site at Structured-Settlement-Report.com

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