Things to Know About Structured Insurance Settlement Payments

There are many things that you should be aware of when it comes to structured insurance settlement payments. One of these is that if you want to buy or sell these types of settlements this must be done through a court. The basic reason for having to go to court to purchase or sell these is so that the seller will not be ripped off as this was a problem in the past. There are not a whole lot of reasons why someone will be getting one of these settlements and usually there has either been a death or a serious permanent injury.

There are many ways that a structured insurance settlement will benefit everyone involved. First off the company or person who is being sued will get to pay the injured party over time rather than having to come up with a significant amount of money at one time. In addition it is great for those who have been injured or are suing on behalf of an injured party as they will have permanent income for a period of time without having to worry about how they will earn money. This is a great way for them to be able to have money to cover the necessary medical and living expenses of day to day life.

If you have bills that need to be paid now and you do not know how you are going to pay them and you have been awarded a structured insurance settlement then you might find that you would rather have a lump sum. The best way to get this is to be able to sell your settlement to an individual or company that is willing to give you cash now for your settlement later. The thing is that in most cases you will be giving up all of your settlement to get the cash now.

In the past you did not have to make these transactions through a court. However too many people ended up getting ripped off so in 1982 there was an act passed by Congress called the Periodic Payment Settlement Act. This included a special clause that made such settlements tax free as well. However if you get the money as a lump sum then you must still pay taxes on it so this is another way that you will lose part of your settlement when you choose to sell it for immediate cash.

The idea behind all of the laws and regulations was to basically keep people from selling their structured settlements for too little when they were desperate for cash. So if you want to buy or sell a settlement now then there has to be a court review it. This is not necessarily a bad thing and it is nothing that takes too much time or effort and in the end it helps to protect all parties involved.

Just remember that once you sell your structured settlement that there is no way that you can get it back. If it is your only source of income then you could potentially be without an income so think long and hard about what the best choice for you really is. This is one thing that is going to help you to make sure that you make the best decisions.