How To Sell Structured Settlements

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Sell annuity payments from structured settlements for cash
Cash flow industry specialists in helping people sell structured settlements will help you or a loved one sell annuity payments from your settlement for an immediate lump sum payment.

What Are Structured Settlements?

Structured Settlements are agreements to make payments over time in exchange for a release from liability arising from accidents, negligence and malfeasance. They are important for their role in resolving many disputes and are often use in personal injury settlements, but are common in medical malpractice and workers' compensation insurance settlements, and wrongful death lawsuit settlements.

Structured settlements can take many different forms, but they all work essentially the same: Instead of offering a lump sum payment to settle a dispute, a defendant or his insurer agrees to provide the injured person (the "plaintiff") a guaranteed series of periodic payments over a predetermined period of time. To accomplish this the defendant or insurer buys either an insurance annuity or U.S. Treasury bonds.

Can I Sell My Structured Settlement?

If your settlement is an annuity settlement, you can assign your future payments to an annuity buyer in exchange for a lump sum payment of cash.

As is the case in selling mortgage notes and land contracts – or any other cash flow, for that matter – note buyers will offer you less than the full face value of your annuity settlement because a dollar today is worth more than a dollar in the future (the "time value of money"). An annuity buyer will discount the value of your future structured settlement payments to achieve its required investment yield.
The stories are often the same: you or your loved one are seriously injured in an accident or are the victim of medical malpractice, wrongful death, or any other negligence or malfeasance. You are offered what seems to be reasonably fair and sensible compensation for your loss: future payments guaranteed by a big insurance company. Your lawyer tells you that annuity settlements are the method used most often in cases like yours because they are good for everyone.

You've waited for years to settle your case. You borrowed money to keep your head above water. You receive your first structured settlement payment ... second ... and third. Your income is lower now, so you make adjustments in your lifestyle, but the bills are piling up and it is getting harder to make ends meet. Suddenly, things go terribly wrong, and you find yourself in a financial crisis. You go to your bank to get a loan, but you are turned down because your credit is a wreck. When you call the insurance company that is sending your structured settlement payments, you are told there is nothing they can do ... and that it not legal to sell structured settlements.
Many insurance companies take the position that it is not legal to sell structured settlements and will advise any recipient of a structured annuity settlement not to try to sell it to an annuity buyer. Some have incorporated specific non-assignment language in their annuity contracts. Though it is true that the annuitant does not own and, therefore, cannot sell the annuity itself, he does own the right to receive and sell the annuity payments.

Selling A Structured Settlement

At the time of settlement, structured settlements are designed to benefit everyone involved in the dispute. The plaintiff gets a guaranteed, tax-free series of payments, the defendant and his insurer are released from liability, and the insurer saves thousands in legal fees and can use its expertise in the financial markets to minimize its loss. Though they usually continue to serve the interests of the defendant and his insurer, annuity settlements are not always the best long-term solution for the plaintiff. Circumstances can and do change for those receiving the structured settlement payments. And since structured settlements are rigid and inflexible, they often eventually fail in their intended purpose.

To sell a structured settlement for a lump sum payment, you will have to find a contract buyer or note broker who understands them and how they work. Interview several. Look for note buyers who have the industry contacts and the specialized knowledge and experience in helping people sell structured settlements.

How To Sell Structured Settlements: Step-By-Step

The steps required to sell structured settlements are fairly simple:
  • An experienced annuity buyer will first ask you how much money you need. You can sell annuity payments to achieve a certain lump sum payment or to receive the highest amount of immediate cash possible, so your annuity buyer will want to understand your needs.
  • Next, your annuity buyer will ask you for a copy of your annuity settlement or contract. This is the key document in selling a structured settlement, and most likely, the only documentation you will need to sell your annuity settlement.
  • Within a week, you should have an offer. A professional annuity buyer will always provide an offer to purchase an annuity settlement in writing. Review it carefully. Make sure it specifies how much you will net from the transaction, and exactly how many of your structured settlement payments the investor is purchasing.
  • If you agree to the offer, you will be asked to sign an assignment letter to formally sell your annuity payments and receive your lump sum payment. After the annuity buyer collects the purchased payments, the remaining payments will revert to you.
As you can see, it is not difficult to sell structured settlements, and converting a portion of an annuity settlement to cash often makes sense after a distressing, life-altering injury – not to mention the agonizing process of getting your just compensation. Since an annuity buyer looks only to the annuity settlement and not your credit, he is able to provide funds when no one else will.

If you decide to sell annuity payments, invest the time necessary to find a professional annuity buyer to make this process, at least, quick and painless.

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