The primary premise behind structured settlements is to provide for the long term financial needs of the person receiving it. Insurance companies, among others, decided people were too likely to frivolously spend any large sum of money they received, so setting up a payment structure was more secure. While there is a certain amount of logic to this, it should also be at the individual’s discretion as to how they spend their money. For this reason, if you decide to sell your structured settlement for a lump sum of money, you should be careful to make the most of the proceeds.


One very beneficial option you have is to invest the money you receive from the sale. If you are otherwise financially stable, this is one of the best options you have. On the same token, you may decide to invest it in your retirement accounts, so they will grow tax deferred or some other investment which will provide higher returns. This is a way for your money to make money.


Another option you may wish to utilize is to pay down the mortgage on your home. This definitely provides for your long term well being, as you will always need a place to live. If you are not buying a home, you could always use this money for a down payment on a new home. Another option is to make improvements to your existing home. Large projects often require a lump sum of money. You could utilize this opportunity to take care of these things as well.


Of course, if you have outstanding bills, the cash payout from your structured settlement will provide welcomed relief. However, you may want to put some of the money away for a rainy day to provide a safety net for future emergencies.