Firms that purchase structured settlements usually buy the payments that you will get in future and they advance you the money. A certain fee is usually charged for the money advanced. The firms allow you to get the money in one lump sum that is larger compared to the payments you are supposed to receive each month. If you choose this option, you will not get the monthly payments that were agreed upon in your initial agreement.
You can purchase structured settlements for personal lawsuits for injuries caused by accidents, medical malpractice and products defects. In most cases, agreements on personal injuries involve large amounts of money and this is one of the reasons why the payments are paid over a specified period. The period may be semi-yearly, yearly, quarterly or monthly. The amount agreed on has to ensure that the recipient’s future income is secure.
When a large amount of money is spread over a long period, you also get to enjoy tax advantages. If you get a lump sum, you forgo the opportunity to receive payments on a regular basis. The regular payments are a good option for personal injury cases because it gives the recipient a steady source of income.
When you realize that you need a lot more money than you are receiving on a regular basis, you can look for a firm that can purchase structured settlements. This will allow you to get the money you require to pay for a house or college fees. To receive this service, you will be charged a fee amounting to about 10% to 30% of the money that will be advanced. This type of agreement can be compared to a payday advance. If you still want to get regular payments, you can negotiate a deal to sell part of the agreement instead of the entire portion. This makes it possible for you to receive future payments.