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What are the pros and cons of a structured settlement loan? How does it work & can it be for less than the entire settlement?

Lake Ozark, MO |

Workman's comp structured settlement, for a small amount every month. Would like about 10,000,which is about equal to three and a half yrs of monthly pmts from work. Comp. Is it worth it?

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Attorney answers 3


I don't know what you mean by a structured settlement "loan." If you mean taking your lump sum settlement and structuring it, the main benefit is that the interest from the money can be protected from taxes, vs. just putting the settlement in the bank and letting it accrue interest. Also, structures usually return better than putting the money in the bank and holding it, especially at the current low interest rates.

The cons of a structured settlement is that you can't get to your money in an emergency, unless you break the structure or sell it, and you lose a lot of money if you have to go that route. Structures are a great idea for young people, or folks who want a guaranteed return.

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I agree with Attorney Farris. Also, if you are looking for a, advance type loan on your case beware!! First of all I do not know of any company that does them for worker’s comp. claims. Second, these loans have extremely high interest rates and I always advise clients to stay away from them at all costs.

DISCLAIMER: David J. McCormick is licensed to practice law in the State of Wisconsin and this answer is being provided for informational purposes only because the laws of your jurisdiction may differ. This answer based on general legal principles and is not intended for the purpose of providing specific legal advice or opinions. Under no circumstances does this answer constitute the establishment of an attorney-client relationship.


It depends upon the numbers

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