Selling Structured Annuity Payments: The Facts

moneyThere may be a number of reasons why you are receiving structured settlement payments. Perhaps you were injured and your lawyer negotiated a structured settlement annuity in order to avoid going to court. Or, perhaps you are receiving structured settlement payments as the result of a divorce or as a way to receive your lottery winnings. However, there might come a time when your financial situation changes and you’d like to cash out structured settlement payments. This article discusses the facts on cashing out your structured settlement payments.

Why Would You Cash Out Structured Settlement Payments?

First, there are only a few situations where selling structured settlement payments could actually benefit you financially. For example, if you were looking to finance a down payment for a house, then you would benefit most from receiving a lump sum rather than smaller, monthly payments. Another example when selling structured settlement payments could be beneficial is if you are hoping to finance your child’s post-secondary education, or if you need to pay medical bills. You should not cash out structured settlement payments in order to finance a new car or something else you want, and a court-appointed judge would not approve a structured settlement cash-out for such a purpose.

What You Need to Know About Selling

Before you sell, there are some important facts to know. It is important to realize that it is not possible to sell structured settlement payments everywhere in the USA. In fact, many states in the USA have laws against selling structured settlements. Be sure to speak with a financial advisor to ensure that this is allowed in your state.

Additionally, some insurance companies are unwilling to package annuities to a third party. Again, it is important to get the expert advise of a financial advisor to see if your situation allows you to cash out structured settlements.

Receiving a lump sum is not a quick process. There is a lot of paperwork and a lawyer is required. On top of that, a court-appointed judge makes a final decision on whether the structured settlement will be sold.

When To Be Wary

Make sure that getting a lump sum is actually a good idea for you. Get several quotes and shop around for a buyer. Also, be aware that many people who buy your structured settlement are doing it for profit or to invest.

Always seek the help of a financial advisor before making the decision to cash out structured settlements. They can help you decide whether it is in your best interest to do so, or whether you are taking a huge risk.