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Sell Structured Settlement Tips

Updated on February 8, 2016

Selling Structured Settlements

Structured settlement refers to a payment plan that is structured and established via an annuity system for reimbursement of some kind of financial or insurance settlement or arrangement. It is regarded as an alternative option to settlements in lump sum. Structured settlements are created in such a way so that the payer regularly keeps making smaller and incremental payments to the payee. It is considered as a win-win situation for both parties as the payee has a regular inflow of income while the payer does not have to dole out a lump sum payment, up front.

In simple words, a structured settlement is a payment plan wherein the compensation amount is divided into many smaller installments which the payer pays to the payee over a period of some specified months/years. This helps prevent long-drawn litigations as most defendants are ok with structured settlements as their burden gets distributed over a period of time. It is beneficial for the plaintiff as well as he/she gets compensated without suffering through a lengthy legal process.

Structured settlements come with a 100 percent guaranteed assurance of payments. It is secured with a regular and timely income inflow. Hence, they can be easily sold at a good price to buyers. Plaintiffs may want to sell their structured settlements to buyers in varied scenarios such as a medical emergency, etc., wherein they are in urgent need of lump sum amounts.

How to sell structured settlements?

Plaintiffs may seek the services of a settlement broker for selling structured settlements. The broker will help find a customer or a client who would want to purchase the structured settlement. He/she will also assist in deriving a right market price for selling the structured settlement. In most cases, the price is arrived at by adding the remaining instalments, the profit margin, and the interest rate. The profit margin is usually availed due to assurance of payment of the installments.

It is important to remember that selling structured settlements, especially insurance settlements, may have a very low profit margin. In some cases there may be no profit margins, while in other instances selling structured settlements may actually yield a final lump sum amount that is smaller than the total of all the remaining installments added together.

It is better for plaintiffs to seek a broker associated to the Society of Settlement Planners or the National Structured Settlement Trade Association in order to get a fair price for selling your structured settlements. You may also seek the help of the US Department of Justice to find a bonafide broker. You may also seek the services of a lawyer if the settlement amount after sale is too high. The attorney will help get done the necessary paperwork in such cases.


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