Why A Structured Settlement Payment Is So Popular By George Hostetler At Isnare.com Ezine Articles

Structured settlement payments are becoming popular because of the advantages they offer over other forms of payments and investment options. The payments which are available in the form of annuities are tax-free at the state and federal levels. Moreover, the payments are secured by state and federal laws. The annuities can be invested in U.S Treasury Securities and other low-risk government insured options.

As against a structured settlement, a lump sum can be difficult to manage by an individual who will have to grapple with the complexities of financial investment and tax laws. Moreover, if the management of a lump sum amount is handed over to a third-party who turns out to be unscrupulous, the resulting loss can be very heavy. In contrast, with structured payments, the loss is usually of an amount due at a given time. Structured settlements offer flexibility and the payment cycle can be fixed according to the beneficiary’s convenience. Structured settlement payment schedules and amount are decided after carefully considering the beneficiary’s present financial condition, age, and responsibilities. The annuity money can be used to pay off a large bill upfront and the remaining money can be obtained over a period. People who meet with an accident and are unable to earn for themselves prefer a structured settlement payment that keeps the money coming in regularly. It allows them to plan for their future and the future of their near and dear ones.

The Federal tax code was amended in 1982 to allow for structural settlements; this was done so as to allow individuals better security with large sums of money. A major advantage of structured settlements is that they are adjusted for inflation so that their sum is greater than a lump sum payment for the same amount. The paying party, which is frequently an insurance company, also prefers structured settlement payments because the payments are bought upfront in the form of an annuity and the amount they pay is less than the sum received by the beneficiary. A defendant too favors a structured settlement as it saves him the cost of court expenses and stiff attorney fees. Thus, structured settlements are beneficial for all involved.

Published At: Isnare Free Articles Directory http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=48968&ca=Finances

Important Notice DISCLAIMER: All information, content, and data in this article are sole opinions and/or findings of the individual user or organization that registered and submitted this article at Isnare.com without any fee. The article is strictly for educational or entertainment purposes only and should not be used in any way, implemented or applied without consultation from a professional. We at Isnare.com do not, in anyway, contribute or include our own findings, facts and opinions in any articles presented in this site. Publishing this article does not constitute Isnare.com's support or sponsorship for this article. Isnare.com is an article publishing service. Please read our Terms of Service for more information.