How to plan out structure settlement effectively

A structured settlement pays money owed from a legal settlement through periodical payments in the form of a financial product which is known as an annuity. Personal injury complainants who win or settle their cases often choose to take their settlements as a series of payments in over a period of time, rather than a lump sum. This series of payments is known as structured settlement. You can calculate your annuity using a structured settlement calculator.

Whether one should go for a structured settlement or not, it depends on various factors such as tax liability and how one plan to spend their money. Structured settlements provide a better future guarantee of money than a lump sum which can be spent very quickly. Below you can read about the basics of how structured settlement works. When you agree to take your winnings as a structured settlement instead of receiving one large amount of money, you will get periodic payments over the course of a fixed number of years. Suppose if you win $500,000, your defendant will be bound to pay you $50,000 on every month for several years. You can use a structured settlement calculator to get an estimate of how much your structured settlement is worth. You have the option to design your own structured settlement so it gives you the money at the time of your need. The options you have are as follows-


  • Large initial payment: If you’ve been unemployed for some time and can’t pay your bills then you can design the structured settlement to provide a large amount of money initially so that you can pay the overdue bills, pay off a mortgage, or buy new items that you need.
  • Additional amounts for extra expenses: Some settlements are designed to give a yearly income, with additional money allowed to pay extra expenses like college fees.
  • Increasing payments over time: Structured settlements can be designed to increase the amount of payments over the years. It will start low and increase over time.
  • Payments decrease over time: Structured settlements can also start high and decrease over time. If you think that your income will increase over time then it might be beneficial for you.
  • Delayed payments: You can also choose to delay payment of your winnings until you reach retirement.

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