Payout Options for Your Structured Settlement
There are a variety of different ways to receive your structured settlement, including for a specific period or for life.
Structured settlements are a form of annuity that distributes money based on a civil lawsuit settlement. These payments are meant to provide a long-term stream of income to meet a claimant's financial needs, and can sometimes provide various payout options.
If the settlement amount is small, it is not uncommon for insurance companies or the wrongful party to provide a one-time lump sum. For larger settlement amounts, payments are usually disbursed through periodic payments.
Structured Settlement vs. Lump Sum
When you win a civil lawsuit or settle out of court, there are two popular ways to pay damages. Each option has different advantages.
Lump Sum Settlement
A lump sum settlement is a one-time payment. This option has the most flexibility and freedom.
- Access to a large sum of money at once
- Pay off debt or make large purchases
- Invest for potential growth
Structured Settlement
A structured settlement disburses periodic payments over a set period of time.
- Long-term, consistent income stream
- More financially secure
- Prevents spending entire amount too quickly
Structured Settlement Payments
There are a number of ways to set up your structured settlement so you get paid in a way that makes sense for you. Many parts of the contract can be customized:
Payout Options
One of the most important decisions you make when establishing a structured settlement is determining how long the payments last. Some of the most common payout options include:
Lifetime Payments
Structured settlement payments are distributed until the claimant's death. At the time of death, all payments stop and nothing is transferred to a beneficiary.
Period Certain
Payments are distributed for a fixed period of time, like a certain number of years. Once the term is over, the payments stop. This option could be risky if you rely on these payments as your only source of income.
Life with Period Certain
This option combines period certain with lifetime benefits. You are guaranteed your payout within the certain period. If you die during the period, a beneficiary will receive the remainder. If you live past the certain period, payments continue until death.
Joint and Survivor
Your structured settlement is guaranteed to pay out to you and your beneficiary until both of your deaths. When you die, your survivor continues receiving payments. Popular among married couples.
Let CBC Help
If you have an inherited annuity and are interested in selling it, CBC Settlement Funding can provide you with cash now. Our experienced team will walk you through the process and answer any questions you may have.