Sell Structured Settlements or Your Annuity

The legal and insurance system has for years used the“structured settlement” approach to settle and resolve lawsuits.  The cause of action could be an accident, medical malpractice or some other thing in which a person or persons are injured or damaged. The concept is very simple, for a release of the liability the defendants will purchase an agreed upon monthly (or annually or a series of lump sum) payments to help the injured party financially.  Since this is a legal document the terms of the agreement are in writing and are approved by the state of residence.

Many factors are considered when planning a structured settlement, such as mental and physical health of the recipient, age, duration of the payments and other future financial considerations. An insurance company is used to provide the future funding of the agreement and is regulated by the state and under direct jurisdiction of the courts.

Often in life situations can change and while at the time the structured settlement was implemented it was based on a certain estimate of future needs.  Normally these situations become variable and a future need for a different sort of settlement may make more sense.  It may become in the best interest of the recipient to convert the structured settlement to a lump sum cash payment.

Recipients receiving a stream of monthly payments under a settlement agreement often don't realize that they can sell all or a portion of their annuity payments and receive a cash lump sum. By changing the structured settlement to this money could provide funding to meet the current life needs of their family. This process of entering into a contract to sell ones legal right of receiving future structured payments to settlement companies in exchange for the present value of the money is known as factoring. Factoring is a method in which the time value of money is calculated based upon the current value of money.

Companies will compete for your structured settlement account.  It is important to have an idea of what you wish to accomplish and what the purpose of the lump sum payout would be used for.  It is also important to have several companies offer you a proposal for the selling of your settlement.  Many factors can enter into the sale and by asking for several options the possibility of receiving the most money would be a possibility.  It is always best to shop and compare offers.