What do you understand by structured settlements?
It is basically the payment which is usually made to a person who has suffered an injury as a result of the negligence of the defendant and has now filed a claim. The basic payment options of a structured settlement plan can be once a month, quarterly, half yearly or even annually.
A basic idea of the periodic payment plan
Structured settlement which is also known as periodic payment is a good payment plan in cases of injuries. For a claimant it acts as a financial protection which also has certain tax benefits and in case of the payee the advantage is that he or she gets to pay off this huge amount conveniently. The main feature of periodic payment is that it helps you to break the payment and pay it throughout the lifetime of the person concerned. In most of the cases payments are disbursed regularly and in the remaining cases a lump sum amount is paid in advance and the balance is paid at periodic intervals. And in cases where the claimant dies the balance amount is paid to his or her family members.
Periodic payment is a powerful monetary tool designed solely for the injured people. The reason why government had introduced this plan is because most of the injured people when they get a lump sum amount in hand tend to spend it before there is any such requirement. The various financial advantages are:
§ You are entitled to assured payments throughout your lifetime.
§ Total exemption from any kind of taxes.
§ Scope of personalized planning with professional consultants so that you can meet both your present and future financial requirements.
§ No risk of any kind of monetary loss.
Is it wise to sell off these periodic payments?
If the claimant decides to sell off a part of or the entire structured settlement payments today then they have every right to do it. But remember if you opt to sell it today you would be paid a flat interest rate for the future amount. So before you make the decision to sell it off, consider the amount of assured money that you are sacrificing. It is true that none of us know what future has in store for us, so if the recipient wants to improve his or her living condition today by selling his or her future periodic payments, then there is no harm.
Therefore if this option of selling the structured settlement payments and enhancing your living conditions seems interesting then sell it off right away.