I understand that the internet is flooded with advertisements, profiles and legal terms surrounding structured settlements but there are very few sources that help you get the answers you need in plain and simple language. So in this post, we will look at what a structured settlement is and how can you sell structured settlement for a one-time lump sum payment. It doesn’t matter whether you have received a structured settlement or are just looking for information, this post should help you either way.
A structured settlement is an annuity promised to you that will be made out to you over a certain period of time in terms of fixed payment cycle. It is usually the result of a legal settlement or some other situation where you are given access to a substantial sum of money as in the case of lottery winnings.
Structured settlements are payment plans that are meant to help you cover your current and future expenses. By working closely with an experienced attorney, you will be able to come up with a structured settlement that provides you best financial security in the long term.
There are different types of structured settlements that are available –
- Temporary Life Annuity is an annuity that is designated for a set number of years or as long as you live. This annuity ends when you die and your beneficiary is not entitled to the structured settlement.
- Designated Period Annuity is an annuity for a set a period of time. They are usually made out as monthly payments but can be made quarterly, semi-annually, annually, etc. In the case of death, the remaining settlement is paid out to your beneficiary.
- Life Annuity is a periodic payment for a guaranteed number of years. The beneficiary is paid the remaining sum if you are to die before the complete amount is paid out.
You can practically negotiate a structured settlement the way you want. By following the advice of an attorney or a broker, you can explore the options available to you and sign the best agreement available. Please do note that once you sign the agreement, you cannot change the payment provisions. So it is strongly recommended that you consults experienced attorneys and brokers and make a structured settlement plan that will give you the most financial security in future.
Selling your structured settlement – Life is as unpredictable as it comes. Even when you have the best structured settlement plan, life can throw you an unexpected situation that would need immediate financial rescue. Situations like medical expense, your decision to buy a new house or paying the tuition fee for your kids. Thankfully you can sell your structured settlement or annuity in that case. You have the flexibility of selling your annuity either partially or completely. Your selling options are somewhat like this –
Selling the complete annuity – This is where the buyer will calculate the present day value of your annuity and pay you accordingly.
Part of the payments – You can sell only a specific number of future payments
Percentages – You can sell a percentage of your monthly structured settlement payments and keep the rest yourself
Depending on your needs, you can go for any of the above-mentioned annuity selling plans.
Do make sure that you verify the company or the individual you are selling to. Dealing with shady brokers and companies can be a financial nightmare in the longer run. Whatever you do, stay financially safe.