How to Cash Out a Structured Settlement

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Structured settlements can be a complicated topic and there are lots of "fakers" out there giving garbage advice...

I really believe it pays to do your research, especially if you're looking to cash out on your structured settlement

Let's Start By Making Sure We're Starting On The Same Page

If you have a structured settlement or annuity that means you're receiving periodic (usually monthly) payments until you reach the total amount of your settlement.

Example:

Let's say John has an accident at work and is awarded $100,000.00. He might receive this as a structured settlement, comprised of payments that amount to $10k/year.

The structured settlement was introduced in the 1970's mainly because it's much easier and more manageable for insurance companies to pay out periodically instead of all at once.

How To Get A Lump Sum Payment Instead Of Monthly

The only way to get a lump sum from your structured settlement is by selling it.

There are lots of reasons people will sell their structured settlements; the most common is that they need the cash immediately.

Think about it: out of pocket medical expenses might be high after an accident, or you might want to purchase a home but can't get a loan... too many people find out the hard way that you can't borrow money against your structured settlement payments.

Where You Should Go To Cash Out Your Structured Settlement

Many folks will run straight to the "large companies" they hear advertising on TV or radio ads.

Bigger companies might have a "solid branding" and experience behind them but there are also downsides: they usually charge higher fees and they won't give you as much cash as other companies!

Keep in mind: I am not saying you should steer clear of the big companies... I just want to make you aware of your options so you can "shop around" (that's the fun part!) and make the best choice for yourself and your family.

Here are some other options:


Find a direct buyer. There are lots of people who will buy out your annuities as investments.

Advantage: You can often get a better deal because you're dealing with a private buyer.

Disadvantage: There's lots of paperwork and legalities can be a hassle. (Make sure you have a good lawyer who specializes in settlements!)


Sell only part of your structured settlement. You can get pretty creative with how you structure your annuity.

Example: You might decide, instead of selling the whole structured settlement, that you would rather receive higher amounts each month.


Exchange your structured settlement with someone else's. If selling doesn't work or make sense for you, you can find a company or private party that will exchange theirs with yours.

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Cash for Personal Injury Settlements

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Your pain and suffering damages will most likely be minimized if you involve insurance companies in your personal injury settlement. insurance companies give lower compensation because they intend to keep as much money as possible for themselves. To you, personal injury settlements are personal, but to them they are purely business.

Before insurance companies offer compensation, they will try to evaluate how serious the injury is. Usually, the less serious and costly the injury is, the better compensation offer you will receive. On the other hand, if the injury is more severe and costly, the insurance company will have to take the following information into account first: present and future medical needs, permanent disability benefits, physical impairment and/or disfigurement, lost income, loss of family member(s), loss of social or educational experiences, and pain and suffering such as post-traumatic stress disorder, loss of marital relations, depression, anxiety, embarrassment, stress, and property damage.

Knowing the cost of compensation

Insurance companies formulate your compensation cost by adding up several items in a formula which includes all the injury-related medical expenses. These are then multiplied by a number between 1.5 (for less severe injuries) and 5 (for more serious damage), and then added to the lost income due to the injury. Being aware of this information will help you negotiate your case and not be deceived by anyone.

Personal injury compensation also depends on which part of the country you live in. If you are in a low cost-of-living area where wages and expenses are basically lower than that of a high cost area, then your compensation will also be low.

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Cash For Injury Settlements

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Injury settlements are legal contracts that bind the offender to recompense a victim for the financial losses incurred, as a result of an accident. It is also known as a structured settlement and the financial compensation is the outcome of a lawsuit. These payouts are fixed amounts that are reimbursed as monthly payments, over an extended period of time. These settlements guarantee a safe and fixed income for the injured person. This reimbursement is decided upon after negotiations between the legal representatives of both parties. The lawyers estimate the future income loss of the injured person and the approximate medical expenses. They are structured to make the funds available in proportion to the loss incurred, as the result of the accident. These payouts reimburse any disability or incapacitation.

Though these payments prove to be a regular and stable cash flow, they may not always be sufficient to meet medication expenses and immediate cash requirements. Though the payout may be a large sum of money, beneficiaries cannot demand for a one-time payment or advance. A number of people prefer to sell injury settlements, to be able to meet instant monetary needs. People consider this a feasible option. The sale of these settlements does not involve risking secured assets. People can sell injury settlements to meet their financial needs, rather than sell the entire contract. It is a quick source of cash, as injury settlements are legal and do not need to be verified in detail.

Cash for structured settlements are easily available at funding companies. They do not offer the equivalent of the injury settlement in cash. The difference between the value and the cash offered forms the service fee for the funding company. This discounted rate depends on the nature of the settlement, tenure, buying company guidelines and compensation amount.

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