Structured settlements help many injured individuals and their family’s financially by providing consistent, reliable income over which to survive post-trauma. They also protect those individuals who rely on the periodic payments to steady income and support their dependants. However, at times, the structured settlement is more of a security vault, leaving lien holders unable to access funds that they require to pay off an unforeseen expense or settle debt. When this occurs, the court decides that a partial claim should be paid in full. This means that the remaining balance – the structured settlement’s remaining amount – is given to the claimant in one lump sum.
However, not all future payments will go to the individual immediately following a suit. Often, future payments may be delayed until the time a settlement amount is received. If you choose to sell structured settlement payments, you must first determine if there is an adequate market for your annuity or settlement payments. Since these payments are relatively fixed-rate and guaranteed for a certain period of time, their sale may not be viable when interest rates are rising. In addition, the value of your structured settlement may not be appropriate when future payments may be low-value since they will likely be tied to the full face value of the annuity. If your insurance company does not agree to or is unable to settle your claims for a predetermined sum of money before you sell the payments, your only alternative may be to surrender the payments and forfeit any future payments received from that insurance company.
Once you have determined if selling structured settlements is in your best interest, it is time to contact a qualified broker. Your broker will be able to review your case and provide you with the best advice regarding selling structured settlements. Most brokers work on a commission basis, which means you may also have access to discounts when selling structured settlements.
The second step in selling your payments involves contacting one or more purchasing companies. There are several different purchasing methods available. You can sell your payments through a company such as factoring companies, direct selling companies, and insurance companies. In factoring companies purchase the payments you give them on a monthly, quarterly, or yearly basis. Direct selling companies buy at a discount than purchasing from a third party. Insurance companies are the most commonly used purchasing method because they give the highest return on investment.
After contacting a few purchasing companies, you will need to evaluate their offers. Since you have little to no experience in selling structured settlements, you will need to do your research to ensure you are making a wise decision. Start by comparing the cash amount offered by each purchasing company. Also, request a written quote for the present value of your future payments, which is the current value of your future payments minus the initial investment.
To sell structured settlement payments through annuity or investment companies requires a financial plan that details how you expect to receive your payments. It is also important to have a strong financial strategy in place before selling. If you are in good health, you may want to invest the money yourself to build an annuity over time. If you are not in good health, it is recommended that the payments are directly deposited into an annuity or other qualified retirement account.