Life is full of unexpected circumstances. If you've been the victim of an accident at work or of some other kind of injury that has altered your life, a personal injury structured settlement buyout may be the best option to take care of your current and future medical needs and to support you if you are unable to work. But what exactly is a personal injury structured settlement? Why is it a good idea and how do you know if this kind of settlement is right for you?
One great advantage to this type of structured settlement money or the lump sum received when selling it is as follows; in 2001 President Bush signed into law that the federal government will designate any money coming from a pain and suffering settlement as tax exempt. This preferential tax treatment for those injured in personal injury and workers compensation case is guaranteed by Internal Revenue Code 5891.
Personal injury settlements can be valuable to someone who needs to pay for rehab or for someone that may have lost their job due to the injury and needs a steady paycheck. But one may wish to sell their settlement if the medical bills have piled up as a result of the accident and the person needs cash now in order to keep them out of debt and collections.
The primary disadvantage of structured settlements has to do with their lack of flexibility. If your financial or health circumstances change, necessitating access to your money on a faster schedule, then this may no longer be right for you. The only option is to sell some or all of your personal injury structured settlement payments that will turn those payments into a lump sum of cash.
If you're being offered a personal injury structured settlement buyout package, consider the advantages and disadvantages carefully, taking into account the future needs of you, your business and your family. Whether or not a personal injury settlement is best will depend on your individual situation. You need to determine if having a steady income each month is more beneficial to you than a large sum of cash that is readily available.