How Far Out Can You Buy Life Contingent Structured Settlement Payments and Factors that are Considered

How Far Out Can You Buy Life Contingent Structured Settlement Payments

In the world of structured settlement buying, the most unique asset that purchasers can pay a lump sum for is life contingent structured settlement payments.  As the phrase suggests, these are annuity payments from a structured settlement that are contingent (generally speaking) on the mortality of the payee under the annuity- although in some cases they are contingent on a related third parties life.

Understanding when and how far out you can sell life contingent structured settlements requires a well versed understanding of the asset as well as some common sense.  On a basic level, you must understand that you are receiving cash today (a “lump sum”) from a structured settlement buyer and in return there is an inherent risk that the buyer may never collect the annuity structured settlement payments or all the payments it contracts to purchase because the measuring life dies prior to the date of the last life contingent structured settlement purchased.  To mitigate that risk, structured settlement buyers employ a variety of tools.

A tool that some life contingent structured settlement buyer implement is a life insurance policy.  This life insurance policy serves to “hedge” the risk that you the measuring life may pass away and therefore the buyer would not get the full benefit of the bargain in connection with the annuity payment stream it has contracted to acquire.  To understand how this works in its entirety is best left to discussion when you speak to the life contingent structured settlement buyer.

Reaching Your Goals Means Understanding the Valuation of your Life Contingent Structured Settlement

Reaching Your Goals Means Understanding the Valuation of your Life Contingent Structured Settlement

Moving to the question at hand:  how far out can a life contingent structured settlement company buy payments?  This depends on a host of a factors, the most obvious of which are (1) your age; (2) the size of your life contingent structured settlement payments; and (3) when the life contingent structured settlements are due.  By way of example, and only example, lets compare to scenarios:

a)  Seller is a 18 year old Olympic athlete that is the model of health of health.  This young, Healthy seller has immediate life contingent structured settlement payments of $2500 per month

b)  Seller is a 78 year old, former smoker, with various health conditions and is overweight.  This seller has immediate life contingent structured settlement payments of $2500 per month.

Which seller can sell there payments?  Both.

Are the payments, even though they are the exact same amount (i.e, $2500 per month) worth the same to a structured settlement buyer?  No.  Why is that?  Both payments are contingent on a the persons mortality, and the first seller seems more likely to live a longer period of time from today.  Of course, the 78 year old may live for a very long period of time from today but at the same time is more likely not to than the 18 year old Olympic athlete.

If you Are at a Financial Crossroad Getting a Valuation of your Life Contingent Payments May be Prudent

If you Are at a Financial Crossroad Getting a Valuation of your Life Contingent Payments May be Prudent

This side by side comparison provides an extreme and simplified version of the issues that are addressed by a buyer of life contingent structured settlements.  Depending on the factors and others, you may find that a structured settlement buyer could offer you money for payments due in 2050, 2060 and beyond.

Cal the Experts at Catalina Structured Settlements for more information at -800-31703769.