The Pros and Cons of Getting a Structured Settlement
Did you know that in 2017 more than 36,000 people died from unintentional falls? Each year deaths and injuries happen that could easily be avoided. Sadly injured victims and their families often suffer twice. First because of the accident, secondly because of the cost of medical care related to the accident.
Many, however, are able to get the compensation that they need. However, then they are faced with a decision. Should they receive a lump sum payment? Or is a structured settlement a better idea? Why not read our in-depth article to find out which is best for you.
Pro: Tax Benefits
Under US tax law structured settlements are considered tax free. This is because in basic terms no personal injury settlements are taxed. This means that the government will not penalize you for your settlement payment. This is good news.
Con: Taxeable Elements
However, this is not the end of the story. Especially after recent tax law changes, elements related to the settlement could be subject to tax. Punitive damages, some legal fees, and emotional damage are amongst these. It would be good for all claimants to research these thoroughly or accept professional guidance before making a decision.
Pro: Fixed Payments
By their nature, structured settlements offer individuals confirmed payments over an agreed period of time. This means that you cannot spend or lose your money within a short period of time.
The annuities can be tailored to meet your specific needs. For instance, you may need a larger amount of money initially to meet medical costs. In other cases, a person may feel uncertain about future economic conditions. They may reassure themselves by building in flexibility or protection into their personal payment structure.
Con: Unchangeable Annuities
Often you have to decide your payment structure when taking out the agreement. However, circumstances in your life can change. It may not be possible to change the annuity amount or receive a lump sum after this. Should you be in need of a large amount of cash you may not be able to draw on your settlement amount.
Pro: State Support
It is a little known fact that insurance companies have government backing. By this we mean that should the worst happen to your structured settlement provider, its obligations may be covered by the state.
This is based on the fact that federal law does not allow an insurance company to become bankrupt. Most states will step in and ensure that provision is made for its clients. This means that you should not fear that your structured settlement provider will fold and you will lose your money. The government has obligated itself to provide a safety net.
Understanding Structured Settlement Agreements and Much More
Making decisions regarding your compensation claim is never easy. you are already coping with the situation which was the reason for the claim. Now you have to decide how you will receive your compensation. There are many good reasons to accept a structured settlement, as long as you get the right legal advice.
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