Why does a person receive structured settlement? It usually comes down to 2 reasons, either a personal injury or product liability.
This is a financial and legal agreement between the defendant and the plaintiff which refers to periodic payments aimed to be compensation for the injury. The plaintiff is offered structured settlement once the defendant’s attorney becomes sure of the fact that there’s no winning the lawsuit and it’s in the best interest of the defendant that a mutual settlement is finalized. As a result a huge amount of money is awarded to the plaintiff, which they receive as periodic annuity payments from an insurance agency (at times broker).
Now, the question is what may have induced you to start considering a cash-out. Though there are many advantages of holding on to structured settlements, most of the plaintiffs are selling off their structures in return of an attractive lump sum which makes it easier for them to take care of a number of responsibilities which expenditures and/or investments. Annuity payment from structured settlements may be a huge support for some who need a steady source of income for their lifetime but the lump sum can benefit you in a number of ways as well. Let’s take a look at what some of the most popular reasons to selling a structured settlement are today.
Reason Number 1 – Liquidity
You need ready cash. This is the primary reason that leads most of the people to sell off their structured settlements either in its entirety or in parts. Moreover, the economic conditions at present are so uncertain that keeping your money in an insurance agency can no longer be considered to be a safe option. And, the money is not insured against insolvency as well. So, the best way to keep your money safe is with YOU! Once you have cash in hand you can use it for different purposes as and when required.
Liquid cash will also help you in times of emergencies when you are in urgent need of a huge amount of cash.
- Or, you may also need the money to help your near and dear ones to come out of a financial problem.
- Parents may feel the need of ready cash for the academic prospects of their children or improve the infrastructure of their home, or buy a new home, for that matter. As we are well aware of, there’s nothing better than investing in a secure future.
- One pertinent reason is absence of a proper source of income. People who aren’t employed fend for themselves and their families by opting for cash out against their structured settlements. This has become a popular way of ensuring both short term and long term source of employment.
- Paying off debts from credit cards, loans or mortgages, as the case may be.
Reason Number 2 – Investment Opportunity
When there are lucrative opportunities available where you can invest and earn hefty interests or lifetime security, why keep your cash stuck in annuity payments? You can either sell the entire structured settlement or a part of it (annuities) and use the cash. You can take the cash and use it to fulfill a number of important purposes such as:
- Buying a home
- Buying land
- Buying car
- Gold or Platinum jewelry
We are well aware of the fact that investing in real estate is considered to be one of the most secure and lucrative financial transactions at present. Unless in case of extraordinary situations, the value of a house or a piece of land never depreciates, it’ll only increase. So it’s always a better idea to invest in these assets so that you have nothing to worry about a few years down the line. This is the same in case of gold and jewelry. You can invest in gold bars or platinum jewelry, and then keep it saved for the future when you will need to use the resale value for an important purpose.
Reason Number 3: Entrepreneurship
There are many who sell structured settlements for cash in order to own a self operated business. They can either acquire one or start one depending on what they actually aim to do. In such a case they use the cash received from selling off structured settlements (in part or whole) as the business capital. This they believe will ultimately result in a good amount of profit in the future. A number of people are opting for cash out and starting a business of their own in order to secure their future against the uncertainties of the job market.