Cash Now or Delayed Payments

Whenever someone is to receive a large sum of money they can sometimes choose to either take the entire amount right away, or have it pay out slowly over a long period of time. If someone is injured in a vehicle accident or if they’re injured at work and they are entitled to a $50,000 settlement from their insurance company, then they can choose to receive either the entire amount or spread out the payment during a longer period of time called a structured settlement. Payments for structured settlements can range from years to an entire lifetime, kind of like an annuity.

The nature of structured settlements requires people to wait to slowly obtain the full amount of funding. However, there are options to cash out on one’s structured settlement. Various legal financing companies can offer to buy part or all of one’s structured settlement  in return for a lump sum cash upfront. This allows people to switch from their structured settlement plans to one large payment now. Such financing can be used for many things such as pay for medical bills, debt, or it can be used to invest. In some jurisdictions a court hearing is required before they can buy a structure. Whether people should go with the lump sum cash or the spread out payments the decision should be discussed with a financial advisor. In most cases I would probably take the lump sum and invest it in the stock market to make some juicy dividends with. Any amount of money would help with my 2013 goals.

$1,000 Giveaway

Today I am happy to part of a $1,000 cash giveaway with some other blogger friends.


*This giveaway has ended*

Notify of

Inline Feedbacks
View all comments
01/10/2013 4:02 am

Thanks for co-hosting! I would personally take the cash up front but that’s just me!

John S @ Frugal Rules
01/10/2013 6:52 am

I’d totally take the cash up front…then I’d invest it. 🙂 Thanks for co-hosting.

01/20/2013 1:16 am

I would choose cash and find ways on how to earn income using the money that I got. In this way the money will earn interest and will accumulate into something bigger in the long run.