Why would someone want to sell their structured settlement
payments for a lump sum of cash? The most compelling
reason is to gain control of one's own financial affairs. With the
periodic payments received from a structured settlement, the
control of the finances rests with the attorneys and the insurance
company that manages the settlement. A lump sum of cash can
be used in any manner the recipient sees fit, and control of the
money becomes their responsibility.
Is selling all or a portion of your payments a wise financial
decision? In most cases no. Structured settlements were
established to give the damaged parties in lawsuits a degree of
long-term financial protection. Many recipients of structured
settlement payments have been injured in accidents, or have
some other disability that interferes with their ability to earn
income. A great percentage of these people are at or nearing
retirement age, and giving up the safety net that their structured
settlement provides could be devastating, especially if the
money from the sale is not properly invested.
Selling structured settlement payments for cash can cause the
loss of up to half of the long term value of the settlement. If the
lump sum of cash is invested wisely, however, the investment
can be worth more in the long run because of the power of
compounding interest. Carefully chosen real estate investments
could be one way to invest a lump sum of cash. Before deciding
to cash in one's periodic annuity payments to invest the money
elsewhere, a person should consult a professional financial
adviser. A financial professional will take a look at a person's
financial goals and their current situation to help decide if selling
would be beneficial. Selling structured settlement payments can
be particularly risky for the disabled, minors, and the elderly.
If your immediate financial need will not require you to sell all of
your structured settlement payments, another possibility is to
only sell a portion. You may sell a given number of future
payments, or you may also sell some percentage of each
periodic payment and continue to receive the remaining balance
on schedule.
Since 2002, US federal law has required a person to obtain court
approval before selling structured settlement annuity payments.
The goal of the legislation was to protect consumers, but a
consequence has been to increase the time it takes to receive
any cash. In fact, it can take up to 12 weeks to secure court
approval and receive your lump sum payment. When seeking
cash for an emergency, a three month wait may create
problems. A qualified broker can determine how long the selling
process will take with your settlement.
If you are considering selling your structured settlement
payments for a lump sum of cash, you should choose a
company that has the competence and experience to get you the
greatest amount of money possible. The Structured Settlement
Alliance works with the best direct funding sources, not high
commission brokers, so you will find the right financial institution
to purchase your annuity payments. Your personal information
will remain confidential, and you will receive the information and
advice you need to make this important decision.
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