: They provide a guaranteed stream of income, which can prevent "sudden wealth syndrome" where a large lump sum is spent too quickly.

: Once established, these settlements are generally illiquid. You cannot easily increase a payment or access the principal if an emergency arises.

: If you need cash immediately, you can sell some or all of your future payments to factoring companies.

: Factoring companies provide a "buyout quote," but they purchase the payments at a significant discount, meaning you receive much less than the future value of the payments.

: Because the funds are invested in an annuity that earns interest over time, the total amount received through a structure is typically higher than a single upfront payment. Key Considerations and Trade-offs