If you have been injured in an accident and awarded a structured settlement, it is crucial to understand what this means for you. A structured settlement is a financial arrangement that pays out your damages in installments over time. It can be an excellent option for those who need time to heal after their injury or who want the security of regular payments. However, there are some things you should consider before accepting a structured settlement. We will list seven questions to ask yourself when deciding if a structured settlement is proper for you.
1. How Long Will I Need the Money?
The first question you should ask yourself is how long you will need the money. If you only require a short-term solution, a structured settlement may not be the best option for you. However, suppose you expect to have ongoing medical expenses or other costs related to your injury. In that case, a structured settlement can be a great way to ensure you have a steady stream of income.
2. What Is the Total Amount of Money I Will Receive?
It is essential to know the total amount of money you will be receiving from your settlement. This way, you can compare it to other options available to you and make an informed decision. Remember that a structured settlement may not be the best option if you need a large sum of money right away. However, if you only want small amounts over time and do not need immediate access to your funds, then it could work out well for you.
3. What are the Payments Like?
Your payments will be based on a schedule when you receive a structured settlement. It has been agreed upon by both you and the person or company paying out your settlement. It could mean monthly, yearly, or even bi-yearly payments. Be sure to ask about this ahead of time, so you know what to expect.
You will also want to know how much each payment is and how long it will last to plan accordingly. In some cases, these details may not be available until after your settlement has been finalized, but it’s best to discuss them beforehand, so there are no surprises later on down the road.
4. What are the Taxes On a Structured Settlement?
One important thing to note about structured settlements is often taxable. It means you will need to pay income tax on the money you receive each year. Be sure to factor this into your budget and plan accordingly. It’s also important to remember that if you decide to sell your structured settlement for cash, the buyer will most likely consider any taxes owed when making an offer.
5. Is There a Way to Sell My Structured Settlement?
You may be able to sell your structured settlement if you need cash quickly. If this interests you, it’s essential to research how the process works so as not to make any costly mistakes. When consider selling settlement and annuity paymnets, annuity advisors from Settle4Cash.com recommend working with a buyer who is licensed and regulated by your state’s Department of Insurance.
6. How Much Will My Payments Be Worth If I Decide to Sell?
When selling your structured settlement, you can expect the buyer of your annuity or lottery winnings to pay between 50 and 80 cents on every dollar. It means that if you have $100,000 remaining in future payments from an annuity due over 20 years with annual increases, the buyer might offer you around $80,000.Keep in mind that the payments will be worthless as they get closer to the present. For example, a payment due next year may be worth more than one due in five years.
7. What Are the Risks Associated with A Structured Settlement?
There are some risks associated with structured settlements. For example, if you need to access your money quickly and sell your annuity or lottery winnings, you may not get as much money as you would have if you had waited. It’s essential to weigh the pros and cons of each option carefully before making a final decision.
Conclusion
We have discussed a few questions to ask yourself when settling a structured settlement. If you are considering this option, it’s crucial to have all the facts to make an informed decision and feel confident about your choice.