Education
What Is a Structured Settlement and How Does It Compare to Lump Sum?
• 2 min read
Structured settlements pay out over time. Lump sums pay now. Both have trade-offs.
A structured settlement pays the recovery as a series of payments over time — sometimes for life, sometimes for a defined period. The payments are typically tax-free.
A lump-sum settlement pays the full recovery upfront. The claimant has full control over the money but loses tax-deferred growth.
Structured settlements work well for catastrophic injuries with lifetime care needs, claimants who lack financial management experience, and minors.
Lump-sum settlements work better for claimants who have specific financial plans for the funds, debts to pay off, or business needs.
Pre-settlement funding payoff typically comes from the lump-sum portion of any structured settlement.
Call (800) 297-3834 with questions about funding cases that involve structured settlements.
