A structured settlement has become an increasingly popular financial arrangement for people who have been injured to receive periodic insurance payouts. The benefit of periodic payments is the guarantee of an ongoing income which allows the individual to spend the money wisely and avoid splashing out on unnecessary purchases. It has become common to your sell structured settlement to a company, who in return, pay a large sum of money. This is a tempting option for many who want to get their hands on the money quickly – however, it is not always the best option. Before making this decision, a few key points should be taken into consideration.

The Losses

The first step is figuring out the loss that will be made after taking cash for structured settlements. The structured settlement payments are generally tax-free; however, once the lump sum is accepted, you may need to pay both state and federal tax. This could significantly reduce the settlement’s value. Furthermore, when selling your settlement the company’s aim is to make as much money as possible – so remember that you will be underpaid. Cashing out may equal quick money, but it will be far less than its real value.

Don’t Rush

The next step is taking your time. This may sound a little obvious, but accepting the first buyer without doing careful research could result in a serious loss of money. Would you trust a stranger with your wallet? No? Then make sure that you carefully search for a well established and reputable funding company. Using the Attorney General Office and Better Business Bureaus records would provide you with invaluable advice on accredited and reliable companies. Look out for any complaints that have been made against any of the buyers and avoid them! Homework is boring and will take time, but the results will be well worth the effort!

Sell Only What You Need

A reason that many sell early is that they are in a serious financial situation and need financial aid. Selling your structured settlement will help ease this burden significantly and is beneficial for those who need it. When looking at your finances, will the money made cover your financial necessities? Will you still have a sum of money left afterward? Having left-over money at your disposal is a wonderful feeling, but avoids the temptation of spending it on a new car, holiday or kitchen. Money should be invested wisely for the rainy days when you need it. If you only need a certain percentage of your structured settlement to cover your expenses, it may be worth considering a partial cash payout. This would provide you with two advantages; quick and easy cash to pay off the necessities and the guarantee of steady monthly payments in the future. Not everyone is fortunate enough to be able to consider this option, so take the time to think carefully about investing in your future. It could make a big difference in the future!

Another thing to remember is that when you sell a structured settlement for a cash sum, you do give up part of your eventual annuity value. When working with a company that buys structured settlements for cash, make sure you clearly understand what you give up by selling for a lump sum. Many people conclude that having a large sum of cash right away is the best choice for their particular financial situation.

Advantages of Selling a Structured Settlement

The main advantage of selling a structured settlement is acquiring a large sum of cash immediately. Sometimes people who are awarded this type of settlement in a personal injury case need a large amount of money to cope with bills and expenses while they are out of work. Additionally, once a settlement is sold for a lump sum, if the person or entity making the payments should declare bankruptcy or otherwise breach the contract, collecting from the payer is the problem of the company that bought the structured settlement. In other words, if you sell a structured settlement and the payer stops making payments, you’re not left holding the bag.

In Conclusion

Selling your structured settlement is not a decision to rush in to. Take your time shopping around for the best deals and do not take an offer from a company if you do not feel comfortable. It’s your money – so choose wisely!…