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Structured Settlements: Why You Should Choose Structured Settlement Sale

Updated on July 3, 2011

People who currently receive money in the form of regular payments from an annuity or structured settlement do have options to turn those payments into larger sums of cash. This is often the best choice when the structured settlement payout is not meeting the recipient's needs. A structured settlement sale is a good tool to have available to you when you are this recipient; you will want to carefully consider the opportunity, though, to ensure that it is right for you.

Why Do Beneficiaries Turn To Structured Settlement Sale?

In theory the annuity payments that are arranged during the writing of a structured settlement agreement fulfill the financial needs of the beneficiary—the person receiving those annuity payments. In reality, however, by the time a case is settled that recipient has often suffered great financial loss and incurred the expense of mounting debts and medical bills. An inability to work, loss of property or use of it, and/or unpaid medical bills take a financial toll; and where the new annuity payments are supposed to provide for you financially, they do not always cover accumulated or delayed payments, or the fees and charges associated with them. Sometimes the best way to right this situation is to access a large lump sum of cash and be done with the ordeal once and for all.

The other situation that often leads to structured settlement sale is that created by time and unforeseen circumstances. Even if you have managed to come through the settlement and/or court process relatively financially healthy, over time your financial needs and situation will change. There will be debts and expenses that you could not have seen at the time the agreement was made—debts and expenses that a large lump sum of cash could help with considerably, if you could somehow advance your annuity payments. For most people, it is the unforeseen and unpredictable expenses of life that make selling their structured insurance settlement payments desirable. The types of needs that are cited include:

  • Financial emergencies
  • Job loss or reduced income
  • Divorce
  • Mortgage needs, difficulty meeting housing expenses, or looming foreclosure
  • Medical emergencies (either to cover medical bills, a loss of work or function, or both)
  • Access to payments that will survive the recipient
  • Education costs
  • Debt repayment

In many states and regions a structured settlement sale will be contingent upon court or legal approval, so it may be up to a court of law to decide in the end if your reason for seeking those monies is deemed advantageous (which is meant as a layer of protection for you). Those reasons listed above are generally accepted by the courts, but other situations are, too, and any questions regarding what is and isn't normally approved can be answered by a reputable, experienced structured settlement attorney or structured settlement broker.

When Is Structured Settlement Sale Not Beneficial?

Structured settlement sale is not the most beneficial option for everyone who holds rights to structured settlement payments. The decision is highly individual, and can only be decided once all factors are considered. It is important to note that you do have the right to shop around for structured settlement funding partners and compare and contrast the deals and options presented. It is also noteworthy to know that where regulations do exist they normally provide that you be counseled to seek advisement from an independent third party (such as an accountant or structured settlement attorney). Even in unregulated states and regions, this is a good practice, and well within your rights as the seller of annuity insurance payments.

It is difficult to provide a straight answer to the question of when selling structured settlement payments is not beneficial, but in general terms if you are in a good financial position, meeting your financial obligations with no pressing or stressful bills or debts and no present need for access to a large lump sum of cash, then your selling structured settlements will be of negligible benefit to you. Again, however, it is worth taking note of an important factor—by law structured settlement sales may take between 45 and 90 days to process (because of the need for court approval) so it is worth considering that "current need" is a relative term.

Where Can I Go For Help For Structured Settlement Sale?

It is difficult to decipher whether a structured settlement sale is a good financial move for you. It is a great start to begin that decision-making process by researching the facts of the matter. As mentioned, however, this is a highly individual situation, and the answer will be different for each and every person considering selling structured settlements. Unless the answer is very clear for you, you will most likely want to talk with a professional who can help you weigh the possibilities.

Structured settlement brokers are one resource, so long as you research those you consider and make sure that they have a good track record and the experience and knowledge to be able to help you. A structured settlement attorney is another, less [financially] interested party who can provide information to you and/or evaluate what you have been told or offered by a funder. A third resource might be a certified structured settlement consultant if there is one accessible to you (but do be sure to confirm who they are working for and paid by). And as a final resource your national structured settlement trade association can act as an information resource (although they will stay neutral in actually advising you personally). The resources to help you decide upon a structured settlement sale are out there, and it does certainly behoove you to take advantage of them, so that you are not taken advantage by another.

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