There are many ways a Structured Settlement can help you.
1. It helps provide financial security. A long-term structured settlement provides financial security by creating a set source of guaranteed income. Structured settlements guarantee a certain return on your money, unlike the return on a typical investment made with a cash settlement.
2. It eliminates the burden of dealing with a lump sum settlement. Although most people think that they can handle a large cash settlement, in reality, the money often disappears all too quickly. Studies prove that most people who receive cash settlements spend ninety-five percent of their money within five years. The settlement money is spent because people often lend money to family and friends, make risky investments, or buy expensive items. With a structured settlement, there is a contract specifying a certain amount of payments for a certain length of time, and that helps ensure that you’ll have money in the future to meet your needs.
3. It helps protect you AND your family. If you don’t receive needs-based public assistance benefits, you may set up your structured settlement so you receive a monthly check which can help pay for food, clothing, transportation, and housing. Plus, your structured settlement can help pay for your children’s school tuition or to provide income for you when you retire.
4. It’s tax-free. Although cash settlements are also initially tax-free, the interest earned on investing that money is usually fully taxable. However, in an effort to promote the use of structured settlements, Congress changed the federal tax code so that every structured settlement payment received for physical injury or illness would 100% free from federal taxes.
5. It’s backed by the highest rated insurance companies. With a structured settlement, a highly-rated life insurance company contractually guarantees your future payments.