When someone settles an injury claim for a significant amount of money, there are some definite advantages in considering a structured settlement.
First of all the growth on the money in a structured settlement is tax free. In other words, you invest the money with an insurance company and they give you a return on the money you invest over a period of time. Most personal injury settlements are tax free but the interest once you invest that money into a bank or a CD or another investment portfolio is not going to be tax free unless you put it into a structured settlement. So putting the money into a structured settlement increases the value of a settlement by making it tax free.
The second advantage is that it allows someone to make sure that the money they're receiving in their settlement will be available for them over the course of time. The worst thing someone can do who has no experience with investing money and preserving it is taking a lump sum and losing it because they didn't invest it in the right spot or they throw the money away on something that's not going to last for them. So, when you do a structured settlement it allows the insurance company to pay that money out on whatever schedule you want over whatever period of time you choose. It's guaranteed to come every period that you decide during that length of time.
And the third advantage is that it allows the settlement amount to grow tremendously by delaying the time that you take the benefits. Let me give you an example. I'm working on a structured settlement currently with someone who is pretty young and when we looked at the amount of money that they're going to receive it actually will end up being double the amount of their settlement. So over the course of their life they will receive twice as much as the settlement amount by delaying it and taking it monthly.
So these are the three major advantages of a structured settlement. And, they should be seriously considered. Talk to your lawyer because they are familiar with how they work and how they can best be structured to help you and make sure the money is available when you need it.