When you sell structured settlements you are essentially buying a fixed annuity. A structured settlement pays money to someone injured in a civil settlement through periodic monthly payments in the form of an annuity. However, occasionally civil lawsuits don’t involve civil court and the monetary compensation you seek isn’t in the form of an annuity, but rather in a lump sum.

This is a very difficult situation because you need to calculate the present value of the settlement. If the cash value of your settlement is greater than your actual cash value, it is possible to sell your settlement payments for a profit. However, this can be a very difficult process if you are unable to determine what your settlement is worth. This is especially true for those who have been injured in an accident or suffered from medical malpractice. In these cases selling your settlement payments is often done to get additional funds to pay for your personal expenses.

To determine the present value of your settlement, you will need to understand how the settlement is actually valued. Basically you have to multiply the amount you would receive for the settlement (the actual cash value) by the duration of the time that you have left to live. After you find the average cost to buy your settlement, you can make a reasonable estimate of how much you will sell it for to obtain the largest amount of cash possible.

It is important to note that even though you calculate the present value of your settlement the amount of money you are getting is determined by the market value of the underlying asset at the time you received the settlement. You cannot sell structured settlements for more than the present value of the settlement because the insurance companies that underwrite them are required to pay taxes on any gains that are made when selling structured settlements.

One of the best ways to sell structured settlements is to obtain a lump sum payment rather than waiting to receive an annuity that is based on your original payments. You could also choose to sell your settlement payments into a new annuity product that allows you to receive a regular annuity payment instead of an initial payment. Regardless, of your method of selling your structured settlements you should take steps to protect your interests. Always check with your financial advisor and your state’s Department of Insurance in order to ensure that you are doing everything legally.

Selling structured settlements is a legal process, but you have several options to protect your rights. so take the time to learn as much as you can before beginning the process. Your attorney can tell you which options are available and how to best protect yourself.