For many people it is a great idea to purchase structured settlements instead of agreeing to a lump sum payment. These settlements are signed after the defendants accept their fault and are either ordered by the court to pay the claimants compensation or agree to such an arrangement in an out of court settlement. There are two types of compensation available with the first one in the form of a lump sum payment and the second one comprising of regular installments stretched over years or the life time of a person.
In many cases it is better to opt for these settlements for a variety of reasons. The financial assurance of receiving regular payments over years and decades eclipse the importance of a single lump sum payment that you might spend in a few months. Also, people suffering from debilitating injuries need life-long treatment and they cannot finance that with a single payment.
Financial stability
The best feature of structured settlement plans is the financial stability they offer. If you have sustained a major injury such as one related to the backbone or legs, then you will need regular medical treatments. If you agree to a lump sum payment then the money will quickly run out. It is difficult to manage large amounts of money and spend them cautiously. This will drain off your resources and you will be left with little to pay for subsequent medical treatments. If, however, you purchase structured settlements then it will be guaranteed that you will receive a fixed amount every quarter, six months, or a year. This will enable you to pay for medical expenses even after ten years of signing the deal.
Better management
Even if you don’t have many medical expenses, there is always a chance of splurging once you have money. Your injuries will heal if they are not of a debilitating nature but you will lose your money for other expenses. It has been observed that more than half of those receiving lump sum payments spend the entire worth within a year or two. A regular payment, on the other hand, will ensure that you have money after five or ten years. If you have signed a life-long plan then this will be valid until your death.
Quicker payments
If you purchase structured settlements then you will be able to receive payments quickly. Defendants find it more difficult to cough up a large amount of money then paying in smaller chunks. These types of settlements are arranged and facilitated by insurance companies and this removes any chances of fraud if you have signed up with a reputable institution. You can also purchase structured settlements from more than a single company to ward off any future chances of nonpayment if one company goes bankrupt. There are safety clauses in annuity agreements that will protect you from any such scenarios but it is better to have a contingency plan at the ready.
You can thus choose structured settlements to overcome financial difficulties and finance medical expenses over many years.
