Giveaway: Structured settlement or lump sum payment?

Here at The Outlier Model, we’re grateful to StructuredSettlement-Quotes.com, America’s premier structured settlement and annuity marketplace, for letting us be a part of this giveaway!  Good luck to everyone!

At some point in your life, you may be on the receiving end of an insurance or lawsuit settlement.  Of course, we all hope that we won’t be involved in anything so unpleasant that it requires monetary compensation, but it happens.  Even my own parents have been in a car accident, through no fault of their own.  Or, you might be the beneficiary of an annuity of some sort.  In these situations, your compensation often arrives in the form of a structured settlement.

international money

Photo Credit: Images_of_Money via Flickr

Structured settlements are periodic payments made often as part of a financial arrangement that provides for periodic payments due to some sort of liability.  The downside is that the recipient has to wait to receive their total compensation.  For me, I’d prefer to receive a lump sum amount upfront.  I could invest it, use it as a down-payment on a home, or quickly pay off a debt or two.  It doesn’t make sense for me to pay interest on my student loan while getting an annuity over 10 or 20 years.  I’d rather take the money now and knock off my student loans and all of that costly interest, all at once.

However, it is possible cash out a structured settlement or annuity.  Companies exist which allow recipients to turn their structured settlement or annuity payments into a single lump sum.  Basically, the company will take your periodic payments for themselves and in return, give you a lump sum amount upfront.  Of course, the amount they give you is smaller than what you would receive if you had waited, but in some situations, it may make more financial sense.  For me, I’d use the opportunity to be rid of my student loans.

In the event that you receive a settlement or an annuity, would you take the periodic payments or try to sell it for a smaller lump sum?

While you’re pondering that question, take a look at the giveaway below and enter to win $1000 cash! The contest is open until January 31st.

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