Would You Take a Lump Sum for A Structured Settlement?-$1000 Giveaway

car accidentMost of us usually wake up with the same routine; get ready for the day, head out for work,  drop the kids at school, or complete our daily errands. Hopefully the day goes as planned. Sometimes we aren’t so lucky. I have a good friend who, at sixteen years of age, had a day that wasn’t routine in any way. One morning, while driving into town, she and her younger sister were broadsided by a careless driver. She wasn’t badly injured, but her sister ended up in a coma for several days and has had short term memory problems ever since. While they were awarded a structured settlement plan in the form of an annuity from the careless driver’s insurance company, a lump sum payment would have been a more helpful option if they had been able to sell that annuity.

By the time the settlement was issued, my friend was married and on the way to having two children very early in life. Her sister followed the same path, and unfortunately, like 50% of people who get married, they found themselves divorced within a few years. Both exes were not good providers, and the sisters both had to struggle to support themselves and their children. The terms of their settlement were to receive a payment every so many months, which was truly helpful, but it was hard to get ahead. It could have saved much worry if they had been able to sell the structured settlement, turning those smaller payments into a lump sum. Each could have paid off debt, bought a house, or not had to work so much, allowing more time with their children when they were small.

I would prefer to never be in an accident, but if I was, and did receive some sort of settlement, I’d like to have the option of having one payment as opposed to spreading it out over many years. If finances were in order, the long term payment plan would be a higher total sum, but sometimes a larger amount up front can allow you to get out of a paycheck to paycheck cycle. My friend and her sister have overcome many obstacles to raise four wonderful children who are productive members of society, but it was a struggle. While everything turned out OK, I wish she had been able to have money when she needed it the most.

Maybe you are in need of a little windfall yourself. If so, enter the contest below for your chance to win $1000! This contest is co-hosted by some great blogs and runs until January 31st. It is brought to you by StructuredSettlement-Quotes.com, America’s #1 settlement and annuity marketplace.

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Written By
Sydney White is a Texas-born stay at home mom who enjoys spending time with her family, bargain hunting and, hiking.


  1. What a horrible story. While I agree with Eric, I’d need to see the difference between the payments and the lump sum. If I can earn a similar return on the money, I’d easily take the lump sum. If I can’t, it depends on how easy it would be to receive money from other sources.

  2. It’s never fun to be in an accident that’s for sure. What makes it worse are the vultures that come along with the experience. Your friend’s experience is probably why so many structured-settlement buyout companies are so prevalent these days–they know they can collect on the funds at a fraction of the cost to buy it out because they know many people need the money right now and some are desperate to get out from a bad situation.

    i’d always choose a lump sum payment if given the choice based on the time value of money alone. A dollar now is worth more than a dollar 10+ years from now. Of course making bad decisions or investing it poorly may negate any value time provides, but ideally that is the best choice.

  3. What a terrible story. I am not sure they would have managed their money better had they got a lump sum though, maybe a quarterly settlement works best in this case. I would sure want to get my money upfront to move on with life, those cases can take years.

    1. You never really know what choices people will make in certain situations. If there had been no accident, there would have been no compensation and I’m sure they would have still turned out fine. My friend is doing pretty well now and is still very frugal. She always has been, and I’m pretty sure she would have paid off debt and bought a house if she’d gotten the settlement at once. You do see lottery winners that go broke in a couple of years, so thrusting tons of money upon someone with no plan is a bad idea in many cases.

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