Is a Structured Settlement Right for You?

Is a Structured Settlement Right for You?

Is a Structured Settlement Right for You?

Personal Injury Lawyers | So, you have finally settled a pending lawsuit – whether through a long and intense legal battle or an out of court settlement. Now the question comes up with regards to the payment itself. You may have heard a lot on television about “structured settlements”, and you might be looking at it yourself. The ads promise to give you a large lump sum in exchange for selling out the structured settlement. However, what does it all mean for you and why should you consider structured settlements over a lump sum?

What is a Structured Settlement

A structured settlement is, put simply, payments over time. Like with a loan or credit card repayment, instead of having to pay everything out at once, the settlement is structured so that payments are made over time but without interest. This tends to work out best for both parties as the plaintiff doesn’t have to try to manage a sum of money they never had before, and the defendant can better plan and budget the amount due.

Why Should I Get a Structured Settlement

There are many advantages to opting for a structured settlement over one large lump sum. The first and most important advantage being that it is tax free. While any income from investments are taxable, the money itself is not, thus allowing you to keep every dime for medical expenses, missed time for work, or any other expenses that came about from the lawsuit.

You also have the advantage of not having that lump sum sitting in a bank account “burning a hole in your pocket”. When you take a lump sum, even if you carefully plan out your budget, there is still a risk of overspending it and then finding yourself without the funds to handle medical expenses years from the lawsuit. A structured settlement removes the temptation to spend a little more out of that $500,000 settlement that is supposed to cover your medical expenses over ten years.

Another advantage is flexibility. Structured settlements can be oriented around your needs and they don’t have to be even payments over a given period of time. Say for example that you know as a result of the incident that prompted the lawsuit, you will now need to see a certain specialist every 12 months for an expensive procedure – you can have the settlement terms require a larger payment during the month you would see this specialist and smaller amounts to cover the rest of the year’s regular expenses.

So How Do These Settlement Buyout Companies Work

The companies that promise to turn your structured settlement into cash now by offering you large lump sum in exchange for the structured payments you will receive over time. The lump sum works out to be less than the total amount of your settlement in order for them to make a profit. So why would somebody opt for a lump sum? These settlement buyout companies operate largely because people sometimes underestimate their future medical expenses, and while structured settlements are incredibly flexible to set up, once they are established it is difficult to change. Thus, before setting up a structured settlement, it is to your advantage to research the actual costs incurred as a result of your injury or accident, to ensure that you will have the necessary funds to cover future expenses.


By choosing a structured settlement, you stand to gain in the long run. A structured settlement ensures long-term financial security, which is vital for covering the expenses that result from accidents and injury. This combined with the fact that they are tax free, means you have no reason to not go for a structured settlement option in most cases. However, every case is different and you should always seek representation in order to ensure the best outcome. – Heil Law

The personal injury lawyers at Printy Law Firm can inform you of legal options you may not know you have. If you or a loved one has experienced an injury or wrongful death due to someone else’s negligence, contact The Personal Injury Department at Printy Law Firm.

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