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Structured settlements offer plaintiffs the certainty of payments over a fixed period of time. However, lump sum payments may be better suited for cases involving minors, as they allow for long-term investing, or those suffering from a debilitating injury that will require future medical expenses.
A structured settlement is a negotiated financial or insurance arrangement through which a claimant agrees to resolve a personal injury tort claim by receiving part or all of a settlement in the form of periodic payments on an agreed schedule, rather than as a lump sum.
Instead of putting away the money to provide for their future personal and medical needs, some people will spend it on questionable investments or purchase expensive luxuries. If you think this might be you, then a structured settlement may be a good idea.
Money in the form of a structured settlement helps recipient pay for medical expenses or other costs. Workers' Compensation. Most people know about workers' compensation, which pays workers who get injured on the job while they recover.
An annuity will pay out annually, but so can a structured settlement. The difference is annuities are bought, and they come through investment firms and insurance companies. An annuity is a type of investment. It can be used to have better control over your money.
If you have a structured settlement from a personal injury or other lawsuit, you may be able to “cash out” the settlement. But cashing out a settlement annuity is not always easy or wise. To do this, you sell some or all of your future payments in exchange for getting cash now.
Experts recommend paying no more than 7% of the present value of your structured settlement to a structured settlement purchaser. Seven percent of $180,455 is $12,631.
J.G. Wentworth may be willing to help you out, but it will retain a portion of your payout in return. The total amount it pockets is called the “effective discount rate,” which includes all its fees, and can total 9 percent to 15 percent or more.
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