Although winning a large prize or jackpot in the lottery would present you with a payment of millions of dollars to do with as you wish, you should not ignore the Cash for Life lotteries that provide smaller jackpots paid out on a regular basis over time. These lottery prizes may seem smaller if you take the lump sum, but as they are designed to provide a very long-term prize value, the yearly annuity over the coming decades may be better suited for you.
How It Works
Most of these life lotteries provide a guaranteed minimum payout of 20 years, although in some jurisdictions, the minimum payout time may be different. However, 20 years is the minimum amount of time you can collect your winnings. If you die before your 20th year of payment, your next of kin will receive the remainder of the yearly payments until the 20th payment is completed. But with all cases of Cash for Life lotteries that provide an actual lifetime payment, if you live past the 20th year, you continue to get those yearly payments until you die, whether that be after the 21st payment, or the 18th one, or the 115th one.
There are some “life” lotteries in which there is a fixed time for payments, such as 20 or 30 years. The winner gets those payments for that specified length of time that then end after the final payment. However, most life lotteries do provide payments over the actual lifetime of the winner. The advantage of playing and winning a Cash for Life lottery that actually pays throughout the lifetime of the winner is that the younger you are when you win, the more money you will eventually get over your lifetime, above and beyond the lump sum amount offered.
The majority of these types of lotteries provide the equivalent of $1,000a day or $1,000 a week. But these are paid once a year in equivalent amounts. The $1,000 a day is a yearly payment of $365,000 and the $1,000 a week is $52,000 per year. These payments are way above the average person’s wages and can provide a great living “income” for those winners who choose to retire.
Winners do have the option of taking a lump sum payment of the equivalent amount of 20 years' payments instead. This may be a viable option for older winners, but not necessarily. It depends on your age, your health condition, what you want out of life, whom you may want to help, and other factors.
For many people, the lump sum payment is more attractive as they might have large purchase plans in the works and the only way they could finance it is with the large payment. However, a risk that comes with taking the lump sum is that you may overspend the money. A great advantage of taking the annuity payments is that if you overspend in one year, you haven’t blown through all your winnings. You will get another installment payout for the next year.
What Are the Benefits?
A Cash for Life lottery is a good option for those players seeking to win a large jackpot but not receive all the money at once. If some of that money is put away in a savings account or retirement savings plan, then if you die before the 20 years is up, your next of kin can not only the enjoy the remaining years of the 20-year payments, but may also have a little money available from your savings to live on when the lottery payments stop.
If you continue to live on after the 20 years, you will still get your annual payment and still build up savings. If you live past 80, then you will have really hit the jackpot. If you die into your 30th or 40th year of payment, your family is taken care of.
So, it’s a good idea to add a Cash for Life lottery to your regular ticket purchases. Although it would be wonderful to win $7 million at once, it would also be wonderful to win that $7 million paid over 20 years.
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