Auto Accident Settlements: Lump Sum Or Structured?
Posted on: 12 July 2022
Getting paid for your damages is the goal of a personal injury case. Once the at-fault driver's insurer agrees to pay you what you are owed, your personal injury lawyer will need to know how you want to be paid. Read below so that you can make a good decision about how your settlement money will be paid to you.
Pay Me Now
Many accident victims have impatiently waited for the day to come when they are being paid for their damages. In many cases, these victims have watched as the bills piled up after they were unable to work because of the accident. The financial ramifications of a vehicle accident can accumulate quickly and leave you drained of both emotions and your bank account. That can mean you want to be paid what is owed to you as soon as possible.
With a lump-sum payment, a check from the other driver's insurer is sent to you or your personal injury lawyer. You can deposit or cash the check immediately. After a settlement is signed, you can be paid in a matter of weeks. You can use the money however you wish, and, in most cases, no taxes are due on the settlement check. However, know that if you deposit the check into an investment account, you will owe taxes on any interest it earns.
Pay Me Gradually
You might wonder why anyone would want to be paid in regular payments rather than a lump sum. It turns out that there are a few good reasons for taking your money using a structured settlement.
- The insurer rewards those who opt for a structured settlement by offering them more money overall. That is because paying the victim gradually is less of a financial burden for the insurance company.
- Many accident victims prefer being paid regular sums of money. They can budget for expenses better and they aren't as tempted to go on an unwise spending spree.
- Structured settlements are usually also known as annuities and may be overseen by a third-party financial institution. The fund is guaranteed even if the insurer goes bankrupt, and can be structured to continue paying to the victim's beneficiaries should the victim pass away before the fund is fully paid.
- It should be mentioned that some victims may be offered a hybrid lump sum and structured deal. They might be paid a small lump sum immediately with the remainder being paid in payments. This allows victims to take care of any large expenses.
To find out which type of payment is right for you, speak to a firm such as Jeeves Law Group, P.A.Share