Before 1982, damages paid out due to lawsuits stemming from accident, injury, or workmen’s compensation cases were generally awarded in one large payment.

The Periodic Payment Settlement Act of 1982, enabled by the legislature, modified the Federal tax law to recognize and encourage the utilization of structured settlements as a method of payment in personal injury situations.

Structured settlements offer several advantages over a one-time, lump sum payout.

1. Structured settlements guarantee the security of long-term income. If the victim is confined to a wheel chair or needs constant bed rest and nursing attention, a structured settlement can make certain that sufficient funds will be in hand to pay for the care. This allows the patient and their family to concentrate on health care without having to be overly concerned with the machinations of investing a lump-sum payment.

2. Structured settlements allow income to be spread over time, thus safer than a lump sum payment. Studies from here have shown that some 30% of those who receive lump-sum payments as compensation for accident or injury spend the money within two months, and some 90% have spent the money within five years.

3. Structured settlements are tax-free, both at the Federal and state levels. Because the money is handed out in smaller increments, there is less need for a financial advisor. And with no financial advisor, there is less of a chance of theft or loss of the funds, which would leave the victim without financial aid or income.

Is it possible to sell or get cash for your structured settlement payments ? Yes, click here and you can find numerous entities that like to buy structured settlements, lottery annuities, and other long-term financial arrangements.

You may wish to visit this website for the best price, as different investors may provide radically different offers.

The value of your settlement in present-day funds may be half of the calculated long term value or even less, depending on how the annuity was designed. Once you sell your structured settlement, be sure to understand that the amount of money that you are likely to be offered will probably appear quite small.

The value of your payments was determined by a lot of factors – the length of time you are to be paid, the severity of your condition, and the expected rate of inflation for the time you will receive the money.

As with any financial arrangement, there are benefits and drawbacks to structured settlements. Anyone with a serious injury who requires long-term medical care who is considering such a transaction should become familiar with the advantages and disadvantages of a structured settlement before entering into any sort of agreement.

The advantages of a structured settlement over a lump sum payout are numerous:

1. Structured settlements are tax free. As of 1982, structured settlements are tax free, both at the local and Federal level. Lump sum payments can be tax free, but the investment income generated by them is not. If you have concerns about taxes or having to keep up with tax matters caused by interest or investment income, then a structured settlement might be best for you.

2. Structured settlements provide additional security. Many people who suddenly obtain large amounts of money, such as those obtained in a lump-sum payment as a result of a personal injury or accident, may suddenly find the world knocking at their door, as long-lost poor relatives, salesmen and con men are always interested in people who are suddenly flush with cash. Read more »