The Advantages of Selling a Structured Settlement


Structured settlements are normally given to people who have been injured in an accident due to a plaintiff’s negligence or by insurance companies. These settlements are made when you are due a large sum of money that may include medical bills and compensation for pain and suffering. Instead of receiving one large payout to cover the entire amount of the agreed amount of settlement you are to receive smaller payments over a period of time until the full settlement amount has been received.

While receiving payments over a long period of time ensures that you will have future income. If you are unable to work there may be times when receiving a larger lump sum is more beneficial and you may find yourself wondering about whether to accept the structured settlement or choose the one-time option of receiving the compensation in one go.

What Are the Advantages of Selling a Structured Settlement?

Depending on the situation there may be some real advantages in selling structured settlements in lieu of a one-time payment:

  • You have alarge credit card and medical bills from the time of your injury that you need to pay off in order to save your credit as much as possible.
  • You may no longer be able to continue in your career you once had and need a lump sum of money to get additional training or to begin a new business.
  • Your injuries are such that you may not live to see the entire settlement and you want the cash to make the rest of your life easier and pay for your future expenses.
  • You want to set up money for children’s college fund or invest in your family’s future.

What You Need to Know About Selling Your Structured Settlement

There are a few things you need to know about selling your structured settlement. First, you need to consider that when selling your structured settlement for a lump sum the amount you receive from the settlement company will be less than the total of your structured settlement. In most cases, the settlement company’s lump sum offer will be ¾ or less of what your actual settlement is worth since they need to make an immediate payment, which can affect their profitability for the year in which the payment is made.

Therefore, it is important to find a settlement company that will give you the largest lump sum possible.

In addition, you should look for a company that has years of experience in purchasing structured settlements and is willing to help you through the process and ensure that you have all the right credentials and the legal documents needed by the court.

Lastly, you need to know that the selling of your structured settlement has to be approved by a judge, whose job is to ensure that you or your family is not adversely affected in case you opt to sell your settlement. The prime objective is to see that such an act does  not cause a financial hardship for you and your family. In most cases, the judge does approve the sale, but such approvals cannot be taken for granted.

Understanding as much as possible about selling your structured settlement will ensure that you get the best deal possible if you decide that selling your settlement is your best option.