Based on recent news about the secondary real estate for structured settlement annuity contracts, you already know that transferring your structured settlements due under them to an investment vehicle is perfectly legal. But knowing that you are able to sell your future payments to investors who purchase these annuities at a discounted value does not mean that you ought to. You need to understand the legal implications of this before you even think about it. In particular, there are three important questions you need to ask of any brokerage firm which offers you the opportunity to sell your settlement payments.

The first question you need to ask of any brokerage firm which offers you the opportunity to sell your future payments is whether or not the purchasing company buys them “as is”. “As is” means that the purchasing company actually buys the structured settlement future payment from an insurance company at the current market value. This means they will be receiving payments in full as they would if you had actually purchased them from a life insurance company at their present value. You must be extremely leery of any brokerage firm, which suggests that they will buy your payments for less than the present value.

The second question you need to ask is one that is almost too simple to answer. It is a matter of factoring. The factoring company will be the one that actually takes the settlement payments and sells them to a buyer. At this point, it becomes a matter of public record what payments the insurance company is paying you, as well as what the buyer is paying you. So, it behooves you to find out what the “best interest” is for you regarding this aspect of the transfer.

And third, when you actually do meet with any of the brokers who may be able to help you with this transaction, ask what their “average time frame” is. The reality is that these brokers have seen this situation before and know what your needs are. Therefore, their “average time frame” will be based on what they have done in the past. If you don’t know what those results have been, it is very likely that you will not get what you really want. Your financial advisor will be well aware of this fact and will try to give you what you really need, regardless of whether you are lucky enough to have your broker’s “average time frame”.

Step two: A little known but very effective step that many people never even think about is the possibility of having your broker offer you an effective discount rate. You may have heard about the term discount rates, but it may surprise you to know that it is one of the few areas in which many of the same rules apply as with step one. The only difference is that step two requires you to contact a broker. In both instances, your goal is to sell as much structured settlement as possible for as little money as possible. A discount rate is essentially the amount of your settlement will be worth if you were to sell it today.

Step three: Once you have found a few good brokers that have consistently offered you a discount rate, it is time to contact your life insurance company. Although most of them will not buy structured settlements, there are a select few that do. At this point, you are going to be required to get quotes from all of the prospective purchasers. However, you are not required to sell. In order to determine the effectiveness of the quotes, you are strongly recommended to contact your life insurance company and get quotes from all of the prospective structured settlement purchasing companies.