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Structured Settlement Cash How To Defining Cash Settlement In Simple Words

Structured settlement cash is an obligation to pay a certain amount at regular intervals to ensure that the claimant or annuitant is able to maintain a good standard of living through periodical payments over a long period of time.

Structured settlement cash is an obligation to pay a certain amount at regular intervals to ensure that the claimant or annuitant is able to maintain a good standard of living through periodical payments over a long period of time. In case of structural settlement contracts, structured settlement cash is an immediate payment without waiting for expiration of the normal settlement period.

When the payment for a structured settlement obligation is made immediately, without any considerable delay, it is called cash settlement. In this case, the present value of cash equivalent of amount to be paid in installments over years is paid to the claimant without much time lag.

Structured settlement cash Points To Ponder:

Although structured settlement cash is an effective means to ensure regular income to the claimant over a long period of time, but it has some drawbacks to its credit- the most important being the delay involved in exercise of contract. The claimant may be in urgent need of money to meet his day to day expenses or other exigencies such as medical bills, payment of hefty tuition fees for a professional course, purchasing a house, payment of a loan installment, ceremonial expenses etc. In such circumstances, it is the cash settlement option that comes to his rescue.

More Information Regarding structured settlement cash:

In simple words, structured settlement cash is a payment received by claimant to forgo the right to receive future payments. A funding company may provide discounted lump sum annuity settlement in exchange for numerous structural payments one would have received over a number of years. Thus, annuity settlement simply means any type of arrangement in which cash is paid to satisfy an obligation.

The funding company in this case will get all the rights to future payments. For example, an annuity amounting to rupees 10 Lakhs payable at the rate of rupees one Lakh per year for 10 years may be exchanged for structured settlement cash of rupees 5 Lakhs with a funding company. However, it may be remembered that cash settlement may be as less as 50% of the structural settlement.

Structured settlement may be of the total amount of settlement or a part thereof. It offers several benefits to the claimant such as immediate liquidity, better financial management, meeting the exigencies, no unnecessary delay in getting the claim etc. cash settlement is a viable option if the credibility of payee is at stake. One may even opt for structured settlement cash just to further invest the funds realized thereon if better opportunities are available.

While deciding the matter one should carefully analyze the investment opportunity available keeping in view the current rate of interest, expected rate of interest, current inflation, expected inflation rate and related factors. Also, the urgency of expense to be incurred, amount receivable as cash settlement, reputation of funding company have to be taken into account.

The decision whether to opt for Structured settlement cash or not is a crucial one and has to be decided judiciously after weighing the pros and cons of each case. No doubt, the idea of instant cash in hand looks tempting but one should not forget the regular income to be foregone. So, to take the ultimate decisionPsychology Articles, consultation with an expert professional becomes imperative.

We buy structured settlement cash at the best market rates and are one of the best settlement funding companies in North America.

Source: Free Articles from ArticlesFactory.com

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