The Pros and Cons of Using Structured Settlement Companies

The Pros and Cons of Using Structured Settlement Companies

Benefits of Structured Settlement Companies -

In life there are benefits of using certain things like the structured settlement claims. (car accident, on-the-job injury, slip and fall injury, etc)

.individuals who have been unfortunate to be involved in an injury are filled with joy because of the compensation a settlement brings. So people even see it as some form of retirement. Although I will allow individual who are awarded a structured settlement amount to take it the way they deem fit.

In my earlier post, I have talked on what is a structured settlement?. However I am yet to mention the meanings and what a structured settlement company does. So before we consider the benefits o structured settlement companies, we need to define their activity.

Structured settlement companies are companies that  buys your structured payment agreement in order to give you a lump sum. I will try to explain what I mean.

Its been some years now and we have observed that certain individuals who have been awarded  a structured payment either from a personal injury or car accident prefer to take a lump sum. They do these for all kinds of reasons like servicing a debt and other personal expenses. 

There are two sides to a coin.

Therefore deciding to sell  your structured settlement has its own pros and cons.

Now let us quickly consider some of these

What are the pros of Using Structured Settlement Companies

Passive income

There is no one how is not happy to have a passive income source. This is one of the benefits of selling structured settlements.

The reason why these is so is that there is an agreed payment plan. When car accidents occur and lawyers are involved, the jury may rule in the favor of the victim for compensation.

Now this compensation has to be what is feasible. The parties involved would agree on the amount to be paid and how it would be paid.

So in the end, the result may be a monthly payment until the day of maturity.

This is one of the reason why its called a means of passive income.

Cover bills

Another benefit of using settlement companies is that monies that are released in a lump sum way can be used to solve pressing challenges.

These may include personal credit issues. you need to pay these bills .

So when there is an avenue that offers a monthly payments into your bank account, its definitely a positive.

peace of mind

this is definitely another benefit. The reason why many sicknesses escalate according to research is that most people are worried how they would carry on the financial challenge. You get peace of mind .

The Cons of Using or selling your  Structured Settlement  with Companies:

A tax cuts

Taxes are real. There might likely be a cut as some percentage of your earning may be taxed. You need to ask your attorney for these.

Again, the company has its own share of the spoil. This is normal as they will state in your agreement wit them.

Taking too many risk

Many people do not really know how to manage a lump sum amount. Some people could end up gambling with it. Other could lose their cash too. Do not enter an investment with seeking professional advice.

Risk having a loss

 There are many fraudsters around who are after those who intend to sell their structured payment or annuity. These fraudsters disguise themselves as financial institutions. Deal wisely

So we have considered the pros and cons of using structured settlement companies. I believe that the benefits and the demerits should be subjected to professional advice and analysis. All I’m saying is that do your diligent research about selling your structured settlements.