Reverse Engineering the Sale of Structured Settlement Payments
Much is said about how much you may be giving up if you were to sell structured settlement payments for a lump sum. Lets be clear, you definitely “give up” something when you convert a future amount of money for an immediate lump sum. Think about it, someone is giving you money today and by the very nature of the transaction has to wait months if not years for the money to roll in. You can NEVER get a lump sum today for an amount equal to collective face value of the structured payments you are selling.
How is it than that you determine if you are getting a fair and reasonable price for your structured settlement payment due in the future? Any such discussion should start with 1) do you really need to sell structured settlement for a lump sum? 2) have you considered alternative options to cash today that would not involve your sale of structured settlement payment rights. These two over arching issues, along with several others are a good place to start before you sign any contract or even get quotes to cash out your future annuity payments.
If you have determined that selling your structured settlement payments are the right thing to do, the next step is to evaluate whether or not there is an option beyond the sale of the entire structured settlement. Options may include partial and deferred sales. In order to determine which option is right for you, it is often recommended that you shop around to several annuity buyers to allow them to get you a quote or quotes. This process will not only allow you to see different options but will also allow you start understanding what the market may bear in terms of a purchase price for your structured settlements.
Take note that in most cases, if not all, cashing out a small annuity may be require you to sell all of your structured settlement payments- if you were to elect to sell. Larger annuities, those with greater face value, may provide more varied liquidation options. This may or may not be the case depending on restrictions your annuity issuer puts on the payment stream with respect to selling only part of structured settlement payments.
You need to be an educated shopper and understand the ramifications before you elect to proceed. Calling CSF friendly and knowledgeable staff is a great place to start or finish when looking to sell structured settlement.