For many people it is a great idea to buy structured settlements instead of accepting a balloon payment. These agreements are signed after the defendants admit fault and are ordered by the court to pay compensation to the plaintiffs or agree to such settlement in an out-of-court settlement. There are two types of compensation available, the first in the form of a lump sum payment and the second consisting of regular installments that are spread out over the years or lifetime of a person.
In many cases it is better to opt for these settlements for a variety of reasons. The financial security of receiving regular payments over years and decades dwarfs the importance of a single balloon payment that you could spend in a few months. Also, people who suffer debilitating injuries need lifelong treatment and cannot finance it with a single payment.
financial stability
The best feature of structured settlement plans is the financial stability they offer. If you have suffered a major injury, such as one to the spine or legs, you will need regular medical treatment. If you accept a lump sum payment, the money will run out quickly. It is difficult to manage large amounts of money and spend them cautiously. This will deplete your resources and you will have little left to pay for further medical treatment. However, if you buy structured settlements, you are guaranteed to receive a fixed amount every quarter, six months, or one year. This will allow you to pay for medical expenses even after ten years of signing the contract.
better management
Even if you don’t have a lot of medical expenses, there’s always a chance to splurge once you do have money. Your injuries will heal if they are not debilitating in nature, but you will lose your money for other expenses. It has been observed that more than half of those who receive lump sum payments spend the full value in one or two years. A regular payment, on the other hand, will ensure that you have money after five or ten years. If you have signed a lifetime plan, it will be valid until your death.
faster payments
If you buy structured settlements, you will be able to get paid quickly. Defendants find it harder to drop a large amount of money than to pay in smaller parts. Insurance companies organize and facilitate these types of arrangements and this eliminates any possibility of fraud if you have registered with a reputable institution. You can also buy structured settlements from more than one company to avoid future chances of non-payment if one company goes bankrupt. There are safety clauses in annuity agreements that will protect you from such scenarios, but it’s best to have a contingency plan ready.
Therefore, you can choose structured settlements to overcome financial difficulties and finance medical expenses for many years.