There are certain payout options that work well for some people that do not work well for others. It really depends on each person’s individual situation. Lump sum or annuity payments have plenty of benefits, as well as difficulties. Lump Sum or Annuity: Lump Sum:
A structured settlement, on average, amounts to about $324,000. Selling these structured settlements to financial organizations can help give you a large lump sum of cash right now. These can be used for major purchases where you need cash right away. Taking a huge chunk off of your student loan debt, buying a vehicle, or putting money down on a house can all be used by receiving a large lump sum of money through selling your structured settlements.
Over 37,000 Americans use money that was awarded to them from structured settlement payouts every year. Sometimes it’s best to budget your money and not receive a large lump sum but it depends on the person and their situation. You might need cash right away for an emergency, selling off your structured settlements for a lump sum can help.
The majority of people who take advantage of these structured settlement selling options are relatively happy. About 92% of people who sold their structured settlements reported that they are “satisfied” with their decision.
Receiving one giant lump sum cash payout can be great if you need to drop a substantial amount of money at once to get out of an emergency, but it’s not always the best option for people. Selling your annuity and structured settlements can cost up to 10% more in surrender charges as well, and it’s much more difficult to maintain your budget when you received a large lump sum.
By electing to receive an immediate annuity, the money will start appearing in your bank account after about 30 days. This will give you plenty of time to set up a budget and a plan for your finances so you are not caught off guard once the money starts coming in.
By the start of 2014, there were 34.8 million individual annuity contracts in place that exceeded $2.5 trillion.
Whether you decide to receive lump sum or annuity payment options, managing your finances is extremely important. Everyone’s situation is different, so consult with financial experts to find out what is the best option for you.