Cash Payout On Structured Settlement

By Jonathan Summers

The quantity of a cash payout on a structured settlement depends largely on the dollar value placed on a claimant's pain and suffering and terms offered by buyout firms. In a structured settlement, claimants can wait months and years to receive repayment for personal injury caused by motor vehicle accidents, or included in trust funds, or annuities.

By bargaining with a funding agency that provides a lump sum payment for a structured settlement, individuals and families can appreciate financial freedom and accomplish some lifelong dreams. A lump sum cash payout on structured settlement can compensate an annual income for disabled persons, provide money for college, or support funds to consolidate outstanding debt, such as home and automobile loans or charge card accounts.

In a weak financial market, cashing in today on future income could mean the difference between staying financially strong and bankruptcy. Part of a cash payout on structured settlement can be used to purchase more secure, high-yield investment instruments, such as commodities mutual funds, certificates of deposit, or nearly invincible, government-backed U.S. Treasury bills.

Many funding agencies charge as much as 50 cents on the dollar to convert settlements to cash. To assess whether losing up to 50% of future income is a wise choice, claimants should seek advice with a banker, insurance agent, or financial planner.

Claimants should browse on-line funding agencies to obtain several free quotes on what it will take to cash in periodic payments before committing to any one agency. Wise money management will ensure that claimants not only receive adequate and equitable compensation, but also that monies will provide a steady, safe income stream for a number of years.

Insurance companies are aware that men and women are living longer, more productive lives. For that reason, a cash payout on structured settlement can be a real gamble. Some suggestions for handling lump sum payments include using funds to remove debt, especially big-ticket items, such as unpaid back taxes, outstanding medical bills, or student loans. Before taking the big jump to sell structured settlements, recipients need to ask: How much money will be accumulated by waiting on periodic payments? How much indebtedness would a lump sum payment eliminate? In the final analysis the decision to negotiate a cash payout on structured settlement plans is a personal one.

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