While you may be contemplating selling your structured settlement out of a desperate need for cash, or merely to buy something you have wanted, remember that instant gratification has become an integral part of our American culture. If you’ve been awarded a settlement from a personal injury lawsuit, retirement annuity or lottery winnings, you probably get payments on a monthly basis, and will continue to get them for years to come. It can be extremely tempting to sell your structured settlement and have your money all at once—while there are valid reasons not to do so, there are also many good reasons why people sell annuity payments.
Among those who are currently receiving structured settlements, about one in ten would consider selling, either entirely or a portion. Whatever your specific reason for wanting to sell your structured settlement, it is a pretty sure bet that you need liquidity in your finances.
Reasons to Sell
Whether you are receiving lottery payments, insurance payments or a retirement annuity, you are legally entitled to sell your structured settlement and receive a lump sum of money. Only you can assess your particular needs, however here are some common reasons people sell their structured settlement:
- The desire to acquire a business leads many people to sell their structured settlement; they see the acquisition of their own business as an investment in their future, and believe the capital to get them started, in the form of selling their structured settlement, will have big payoffs later on.
- For those who went in with a group to purchase a lottery ticket, selling the annuity can be particularly appealing, as it can convert a small annual payment paid to several different people into a large lump sum for each.
- Some people desire to make a large contribution to charity, such as a scholarship or endowment, and need their money in a lump sum in order to be able to do so.
- Paying off existing debt is one of the most common reasons people choose to sell their structured settlement. If you take a look at your existing debts, you could be shocked to realize how much interest you are paying on credit cards, your home or car, turning the decision to sell your structured settlement into a financially responsible choice. Not to mention, rates on structured settlement factoring transactions are much lower than normal credit card interest rates at this time.
- Many more people need ready cash in order to help friends or family members who find themselves in financial need. Parents may cash in their structured settlement in order to help their children, whether it is for educational needs, or perhaps to purchase a home of their own.
- Returning to college is a common reason to cash in a structured settlement, as it can be seen as a solid investment for the future.
- Emergencies can happen to anyone, anytime, whether they are medical emergencies, the loss of a job, or necessary home repairs which can cost a small fortune. Selling a structured settlement could be a better choice than taking out a loan to pay for these emergencies.
- Many people cash in their structured settlement in order to purchase real estate. Taking the lump sum received from the sale of the structured settlement and using it to purchase rental properties could end up bringing in a rental payment which exceeds the previously received monthly disbursements—a smart choice!
- Employment changes can be a compelling reason to sell your structured settlement, as losing a job can be traumatic, both financially and emotionally.
- Buying a home, or a vacation home are common reasons to sell a structured settlement, as, again, such as purchase can add real long-term value to your financial portfolio.
- Wealth transfer planning can be a motivator to sell a structured settlement; such a plan must be started during your lifetime, and certainly the sooner the better.
- In some instances annuities are inherited--a person who has inherited such a structured settlement may choose to sell and have their inheritance in its entirety, up front.
- Finally, a person who has agreed to a structured settlement may suffer from "buyer's remorse," later and wish they had received their money in a lump sum, thus motivating them to sell their structured settlement.
Although there is a cost to selling structured settlement payments, there are also many great reasons you may want to consider it.
