A plan where you get paid periodically over a preset period instead of a lump sum amount is called structured settlement. This method is usually used when you are paid a huge amount like in jackpot lottery or insurance amount. You can get paid weekly, monthly or yearly. Insurance payments taken in this manner provides a regular income if you have been injured in an accident or your family if you die.
The advantages and disadvantages of structured settlements: Taking lump sum cash is beneficial if you need instant cash for urgent purpose, e.g. if you or your relative has to undergo serious surgery or if your home has been ravaged and you need money to buy household items.
The other factor to consider is that the value of pound can decrease over a longer period of time. Hence the same amount over a period of time will barely meet all your needs. There are many options open if you have received structured settlement, but get expert advice before opting any of them.
A structured settlement broker will offer the best advice to allow you to benefit immensely from structured settlement. But if you live a sparse life, you can choose monthly payment option to benefit from the money coming in.
If you have been awarded compensation for injury in an accident and has left you unable to work, structured settlement is highly beneficial for you. You get a feeling of security in the knowledge that you will get a definite amount every month. It also helps the company paying the money as it does not have to shell out the entire amount instantly.
Selling Your Structure Payment plan: If at any later stage, you want a lump sum, there are various options open to you. But consult the broker for getting the right advice. Before selling off the plan, remember that the broker will take his share of profit. You will have to pay him a certain percentage of the amount once you get the money.
Shop around before selling off the plan. Contact various reputable brokers. Do not grab the first offer you get and if there are any doubts ask the solicitor for his legal advice. This will prevent regrets later on.