Sure, getting a bit of money mailed to you every month through your structured settlement is nice. But you really need a lot of cash now and you are considering a structured settlement lump sum payout. That’s fine – hundreds of people just like you consider this every single day. But there are four things you need to know before you start a structured settlement cash payout.
#1: Understand the Risks and Rewards
Your current structured settlement offers you substantial security. With your regular monthly or annual payments you always know that money will be coming on a consistent basis. This money can help you pay for living expenses or medical bills. It is long term security and there is a certain level of reward in that. However, sometimes things happen in life.
You may feel that a settlement cash payout meets your needs better than these small, regular payments. This may be true. But know that by taking a structured settlement cash payout you will lose some or all of the security of your regular payments. You will also lose the ability that the structured settlement annuity provides to allow your money to grow tax free. And, you will have to pay some fees to access your money. Depending on what you want to do with your structured settlement cash payout, these risks may outweigh the rewards, or the rewards may be great. But think about it carefully.
#2: Understand the Tax Implications
Your original award was tax free. Your structured settlement is also growing tax free. You are receiving payments from the settlement tax free. Now, if you get a structured settlement cash payout, that money will still be tax free – at first. However, if you invest it you could end up paying taxes on the money you earn. Read our article, « With a Structured Settlement Sale, What are the Tax Implications? » for full details on the tax issues of your structured settlement payout.
#3: Be Responsible and Know Yourself
Structured settlements were originally created by an act of the U.S. Congress. This group felt that people who had experienced severe injury would likely need a steady stream of money for a long period of time. The payments are intended to protect you. Some people cannot handle money well and need this protection. Other people are very good with their money and would prefer to take the responsibility for a lump sum of cash on their own. Be honest with yourself. Really ask yourself, « Can I be responsible with a structured settlement cash payout? » If the answer is « yes, » then this may be the best choice for you.
#4: Choose the Right Structured Settlements Cash Payout Company.
Choosing the right company to handle your cash payout is very important. You want a company that is working for you. Pick a company that is caring and committed to your financial needs and goals. Check with the Better Business Bureau and ensure that the company you are considering does not have too many complaints against them. Ask questions so that you know how long it will take to get your money and what will be required of you. Contact Direct Settlement today and we will answer all your questions simply and clearly, informing you so that you can make the best decision possible. And while you are considering your options, take your time to browse through our website where most of your questions will be answered.