If you live in the United States, you probably remember J.G. Wentworth’s infamous commercials, sung in an oh-so-catchy form with lines like, “Call J.G. Wentworth! 8-7-7 cash now!” It’s probably the most experience with structured settlements that you’ve got, after all.

Let’s nail down the pros and cons of structured settlements so you’ll be better equipped to deal with them if you should ever be offered or awarded one.

Upsides Of Structured Settlements
Any amounts received from structured settlements do not count toward your taxable income when it comes to filing personal tax returns.

Unlike true forms of income, monies received from structured settlements do not interfere with your potential eligibility for programs such as Social Security Disability, Medicare, or Medicaid.

You can count on the future value of structured settlements because they don’t change based on market fluctuations – these ebbs and flows affect bonds, stocks, and mutual funds.

These forms of compensation are generally ideal for bridging the gap between defendants and plaintiffs whose ideas of fair payment amounts are far off from one another. Turning to structured settlements in difficult negotiations can save court costs, attorneys’ fees, and a lot of time.

With structured settlements, you’ll end up earning more money over time than if you were to opt for lump-sum payments. As such, they’re ideal for young people who are generally healthy and reasonably have many years ahead of them.

Cons Of Structured Settlements
Although structured settlement payments don’t count as income, certain portions of them can, in fact, be subject to taxes, such as dividends, interest, and monies received to cover punitive damages.

If you find yourself in a financial emergency, you won’t be able to pull early payments from structured settlements. You are able to sell your rights to these payment structures, though you’ll likely lose a major chunk of their value in doing so.

There’s no making changes to a structured settlement. That is, once your settlement is finalized, which happens pretty quickly in most cases, its terms are set in stone for the life of the settlement.

Insurance companies aren’t always required to be upfront about their fee structures. Plaintiffs who opt for structured settlements in such cases can’t work out whether opting for structured settlements over other benefits is a good idea or not, causing people to roll the proverbial dice.