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Structured Settlements

Let’s say you get injured by someone in a car accident and decide to take legal action to cover your vehicle repairs and medical bills. The other party agrees to settle or loses the case in court and has to pay you a settlement. The individual or the insurance company may pay the settlement out in a stream of payments otherwise known as a structured settlement.

In many cases, when a settlement is paid out, it is often through a structured settlement where the at-fault party purchases an annuity backed by an insurance company that pays out regular payments over an agreed upon period of time. If the settlement is small enough, however, the at-fault party may just pay the entire settlement out in a lump sum.

Pros and Cons

The benefits of a structured settlement are rather easy to understand. If a large lump sum of cash is paid out all at once, there’s a greater likelihood that the money could be spent fast. A structured settlement increases the likelihood of a bright financial future because the payments are spread out over time. Additionally, most structured settlement payments are tax-free, guaranteed not to fluctuate, and can be passed on to a beneficiary if the owner of the structured settlement dies. The terms of a structured settlement can be arranged to meet your exact needs.

The cons of owning a structured settlement are very similar to annuity ownership. If you decide to tap into your structured settlement early, you will have to pay surrender charges and IRS penalties if you are under the age of 60. In addition to that, you cannot renegotiate the terms of your contract after it has been agreed upon and signed. You may also lose some money to cover the administrative fees of the insurance company that established the structured settlement.


What to Do If You Want to Sell Your Structured Settlement Payments

While you can’t tap into your structured settlement annuity early, you do have the option of selling a portion or all of your structured settlement payments to a buyer on the secondary market for immediate cash. Structured settlement owners typically will do this if they have an emergency or have incurred significant high interest debt. However, it is important to know that any sale must be approved by a judge to ensure it is in the best interest of the structured settlement owner.

If you are thinking about selling your structured settlement payments, contact us today to receive a free quote. Our team can help you understand the process of selling your structured settlement payments and guide you through the legal process of getting approval from a judge. We our partners with CBC Settlement Funding who will help you get the best deal possible. If you have carefully considered your options and believe selling your payments is the right financial decision, we urge you to speak with one of our representatives today.