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Structured settlements and major purchases
Can you sell your structured settlement? How much money will you get? At some time within the period you are receiving payments for your structured settlement, you may decide that you would like to sell it, or you may be approached by a company that wants to buy your settlement.
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The party that has wronged you is buying an annuity, and the purchase price that they pay up to set up that annuity is But a fraction of the amount you will receive over time. That cash used to create your annuity is invested, and the interest it accrues over the years allow it to grow large enough that it allows you to have a sequence of regular payments. The market worth of your settlement was derived by a number of things - the amount of time you are to be paid, the gravity of your situation, and the expected rate of inflation over the length of time you will receive money.
Once you submit to a structured settlement, you can't exchange it for a single payment, nor may you use your settlement as security for a loan or mortgage. What if you want to buy a home or a car and pay cash, or you have some other sudden large expense?
There are investors who might like to buy structured settlements, lottery winnings, and other annuities. Under certain conditions, you may be able to sell your annuity. At some time you have been contacted by an agency that purchases annuities.
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Anybody that offers to buy your structured settlement is interested in doing so as an investment. A buyer will want to make money on the deal, and for the buyer, that revenue will be spread over the long time that it takes to obtain the payments that constitute the settlement. If you combine the components of length of time, interest, inflation, and the buying individual's income, you will find that the offer made to you may strike you as quite small.
Remember that there might be tax considerations in selling your payments, and because of state laws and the rules of the insurer that handles your annuity, it may not even be possible for you to sell your annual payments. You may be interested in accepting an offer, as the lump sum offered may allow you to tend to your present needs more conveniently than receiving payments on a monthly or annual basis.
If you do decide that you need to sell your structured settlement, be sure to consider that the amount that you will be offered for your future payments will seem quite small. Your payments have been funded through the establishment of an annuity that accrues interest and grows over time, but the value of your settlement in present-day dollars may be half of the total value or less, based upon how the future payments were calculated and structured. If you take the amount of money you receive annually for your settlement and multiply it times the number of years you will be paid, the total will amount to the total worth for your settlement.
You will need to go to court to arrange the sale. Be sure to be on the lookout for financial scams; an attorney can help to make certain that you actually get paid for the transaction. You should talk to several potential buyers prior to accepting an offer, as different organizations may offer widely different prices for your future payments. Be sure to take the time to discuss any potential sale with your attorney.
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