The Pros of a Structured Settlement
A structured settlement will provide you with a long-term income. Individuals that are unable to control their spending need to agree to a structured settlement because they will not waste away all the money that should be used for medical expenses and other costs.

The funds from an annuity are tax-free as long as you do not control the funds. This is why it is important to pick a good annuity company and split up the funds with several companies. If one of the annuity firms declares bankruptcy, you will still receive your structured settlement money from your other annuity firms. Annuities are also protected in most states so you will receive your money even if the annuity firm declares bankruptcy.

The annuity can be structured to cover your specific needs and future costs. This way there is no chance of you taking the money and spending it on things you don't really need only to wind up taking out a loan to cover the costs of the things you actually do need.

You can combine your annuity with an immediate lump-sum and keep the rest in long-term annuities. This allows you to use the lump sum as a down payment on a home or a car. You can even use this money to pay off your debts and to pay for college. The rest of your money will come in the future as it has been laid out in the structured settlement.

A structured settlement can also use the funds for unanticipated medical advances. For example, if you were injured in an auto accident and you had your legs amputated or a severe disability. You can participate in a study for a cure for your condition if one is created in the future.

Structured settlements also help you avoid court costs and expensive attorney fees. It is guaranteed money which is a good idea if your attorney doesn't think you will be able to argue for more money if you take your case to court.

The Cons of a Structured Settlement
When you agree to a structured settlement, you are agreeing to receive payment in the future for the duration of the settlement. This amount will be paid to you in equal installments over the years and it will not calculate inflation. This could mean you are going to lose money over the years.

You do not have the ability to borrow money against your structured settlement. This can hurt you if you need to have the money now to pay for expenses. The only thing you can do is sell your structured settlement for a loss to receive immediate cash now.

If you have too much control over your structured settlement annuities, the IRS may forfeit your tax benefits. This will cause you to pay a large amount of money to the IRS.

Some insurance companies will profit off the annuities because they have worked out agreements with the brokers. They will sell your structured settlement to this third party firm and receive a 20 percent commission for doing so. Some brokers also do not have protection for insolvency.

Structured settlements cost the insurance company less than a lump sum settlement. The insurance company may not disclose how much they are paying to buy the annuity, which means you could be losing money. You should always ask to see the annuity costs and have a good attorney with you that can make a complete assessment of the settlement offer.

Selling your structured settlement to receive immediate cash will be taxed. You are forfeiting your tax benefits and you will have to pay immediate tax on the amount you sell.

You do not have the ability to invest the money from your annuity into other accounts. This will cause you to lose money because it will be sitting in accounts that do not provide you with interest or any financial growth.

With a structured settlement, you do not have the ability to withdraw money when you need it. It is not a like a bank account, you can only get the money on the designated dates that have been agreed upon in the structured settlement.

Deciding if you should accept a structured settlement
Always seek the advice of a tax adviser and a good attorney when you are negotiating with the insurance company. If you select the right structured settlement, the tax will be avoided or it will be minimal. Structured settlements are also a great way to preserve the money you deserved for future expenses. Since you cannot predict what type of medical expenses you will have in the future, it is wise to have this money set aside for any future obligations. For most people, structured settlements will protect them from spending the money on their own. This is especially helpful for individuals that cannot control their spending or do not know how to invest their money.

A structured settlement can also protect you from friends and family members that are eager to have some of your wealth. Since you don't have all the money at once, they will not be able to waste your money away.

Structured settlements are also a wise decision for minors. The structured settlement will provide them with enough money to pay for their medical expenses, plus their college education and other expenses. Since most adolescents are unable to control their money, a structured settlement can protect them from themselves.

Using a structured settlement is a wise decision if you have become permanently disabled as a direct result of the accident or malpractice case. You can use the money to pay for special vehicles, medicines, and physical therapy.

Besides the risk of inflation or a recession, a structured settlement is the way to go. If you don't like being limited to yearly payments, then you need to consider receiving a portion of your settlement now and the other half can be divided as normal. This will help you pay for a large expense now and you will still receive money in the future to pay for all of your additional needs.

You should only agree to a lump sum if you can control your spending and if you know how to invest the money. This money is not to be used to be thrown away quickly; you need to plan for your future with it. Depending upon the severity of your injuries, you may need to accept a lump sum payment because you have a short life expectancy. Discuss your situation with your doctor before you agree to a structured settlement, this way you can use the money to pay for your funeral costs and leave the rest of your earnings for your family members.

If you decide to sell your structured settlement, you will receive a low offer to begin with. The offer is normally based upon the bank rates. If you don't have a smart attorney to help you, it can be easy to lose a lot of money. Keeping your money in a structured settlement will mean that it is secured and a guaranteed income for life.

Depending upon the severity of your injuries, you may want to consider a structured settlement and a trust product. The trust will help you pay for the medical expenses you have now and the structured settlement will give you a lifetime income to pay for your cost of living plus your future medical costs.

A structured settlement gives you peace of mind because you know your money is protected and that you will receive it. Even if the structured settlement isn't adjusted to the current and future economic conditions, it may be easier to accept the money with a loss in the future than to lose all the money now from reckless spending or poor investment decisions. Always speak with your attorney and a tax advisor before you agree to a structured settlement to make sure you are getting the best deal.