How to Sell a Structured Settlement

people laughingHow do I sell a structured settlement? This is the question many of our clients ask us here at Settlement Quotes. The process is quite simple for our clients. We have created a system that allows anyone trying to sell a structured settlement a free service that takes out all of the complications involved in selling a structured settlement annuity.

Our main goal was to make our system as self explanatory as possible. Our system can be broken down into 3 easy steps.

1) Create an account by clicking here.

2) Enter your payment stream information which would be the payments you would like to sell, including the lump sum payments, if applicable.

3) Accept an offer as they appear in your account. We will take your payment stream information and provide you with upto 10 cash offers from competing companies.

This process was created with our clients and the public in mind. This service will beat any legitimate quote offered by any other company. You will receive all of your quotes within 24- 48 hours and have paperwork in your hands within 72 hours.

The entire factoring process takes between 4- 8 weeks to complete. Once you have provided the funding company with the correct paperwork their job begins. They will begin their underwriting process, which includes acquiring a court date from the state your case was originally settled in.

The term "sell structured settlement payments" is incorrect because the payments are not technically being sold, they are being transferred from one party to the other. That is what the factoring process is based off of. To the insurance company who provdes these structured settlement annuities there is no change to the date or payment amount of each payment. The only change is the name that is on the check.

At the court hearing a judge will review the case to make sure that transferring some or all of your structured settlement payments is in your best interest. Once the judge approves your case you will receive a check within 24 hours.

Why Companies Want to Purchase Your Structured Settlement

Settlement AnnuityIt has come to our attention at Settlement Quotes that many clients would llike to know why companies want to become the recipient of their structured settlement payments or why they want to purchase the structured settlement.

There are many answers to this question. The most important answer involves the financial strength of the structured settlement annuity that is created to fund the personal injury settlement.

Many of the insurance companies offering products to the structured settlement industry are AA or AAA rated by Standard & Poor’s. This rating ensures factoring companies that the annuity they are receiving has strong financial backing. These factoring companies take these structured settlement and annuity backed notes and add them to a larger portfolio were they will securitize these structured settlement annuities.

The money a structured settlement recipient receives during a structured settlement factoring transaction is not the true value of the structured settlement. When factoring companies purchase/ transfer payments into their name, they need to cover worker salaries, advertising, transfer fee's, and other costs not worked into the time value of money equation. All of these costs factor into the deduction of money the structured settlement recipient receives when they transfer their payments to a factoring company.

With this in mind a structured settlement factoring company has risks when purchasing a settlement annuity. This is were the commission for the company takes place. Many factors are worked into the overall commission and cost of money that a factoring company has to calculate before purchasing these annuities. An annuity with a payout 10 years from now is a greater risk than an annuity that is currently paying out. These are the risks the factoring companies are willing to take because these annuities are backed by strong financial institutions.

It is important to ask yourself whether selling your settlement annuities to a larger firm is always the best idea. How many other fee's are worked into your lump sum payment?

At Settlement Quotes we eliminate the large commissions that factoring companies take from your lump sum settlement.

Reasons to Sell a Structured Settlement

Structured AnnuityA structured settlement is a financial tool setup buy a licensed financial planner after a judgment on a personal injury tort claim.

Many times these structured settlement annuities are setup for years in the future expecting the individual will not be able to obtain any other fixed income through employment or in any other manner. This is not always true. Many individuals recover from their injuries and can return to work not needing their structured settlement to pay for medical expenses or unemployment. This is the first reason to sell a structured settlement. Although it is not recommended to sell your future payments just because you return to work or do not have medical expenses to pay, but it is an option.

The second reason to sell a structured settlement or settlement payments is if you have a great investment opportunity. It is always recommended to keep part of your fixed income, if it is your sole income. There are options for you though. Lets say you need $30,000 in capital to start your new business. You could sell your last 5 years of payments, keeping the next 3 years of payments to support yourself and your family until your business is established. With this scenario you are providing yourself income through your new business plus three years of additional income to support yourself through the startup period of owning a business.

Another advantage to the above scenario is that you created a lifetime income generator by starting the business were you would not have had income after the guaranteed 8 years left of structured settlement payments if you retained those payments.

The third reason to sell a structured settlement is if you need to pay off your outstanding debts. This is the most common reason for selling structured settlement payments. Thousands of individuals every month sell a structured settlement for this reason. Debt can be very stressful at times and receiving a lump sum is the best out for this situation.

In conclusion there are many reasons to sell a structured settlement and everybody's situation is different. With Settlement Quotes we will work with you to make your dreams come true in the pursuit of happiness.

3 Reasons Not to Sell a Structured Settlement

HandsFirst off, lets explain some good reasons to sell your structured settlement or annuity payments. There are turning points in peoples lives. which require a lump sum of cash. Maybe a son or daughter is going away to college or the opportunity to purchase a new home arises. These are just a couple of reasons which justifies selling a structured settlement.

Having a fixed income is very important in our everyday financial life. It allows us to be able to provide security for our family and live a respectable life that most of us dream about. The financial security of having a guaranteed amount of cash deposited in our bank account each month keeps us worry free about where the money is going to come from to pay our monthly expenses. This type of income creates less stress and creates the freedom to do the things we enjoy the most.

The question you should be asking is "Do I really need this money now?" This question is the basis for our first reason of why you shouldn't sell a structured settlement. What is the true reason you are selling the annuity payments? This answer must be a valid reason because the judge must determine that your reasoning for the sale of the structured settlement is a good one. A judge will not transfer the payments to the financial institution if he does not see a valid reason or does not agree with your viewpoint about your financial future. Buying a brand new BMW is not a good reason to cash in your fixed income, maybe you could settle for a Ford.

The second reason not to sell a structured settlement is if the periodic payments are too far in the future. The problem with this situation is that the value of money today will not be the same as it will be ten years from now. If you are receiving payments that start five to ten years and beyond, it wont make any sense to try and cash them out because they will be worth pennies on a dollar in ten years. A case such as this causes many other difficulties as well. A case of this nature would have a discount rate up above 50% and would not get approved in court even if it made it that far.

The third reason not to sell a structured settlement is if there are other viable sources of cash that are available to you. Once again fixed income is very important to an individuals financial portfolio. Removing this option only hurts the portfolio. There are numerous ways of receiving a lump sum of cash. A bank loan backed by your fixed income is one alternative or accessing the equity in your home would be another. These are just a couple of ways to receive the extra cash that you may be looking for.

Structured Settlement Benefits

Structured AnnuityStructured settlements are designed to provide a steady stream of income over a long period of time. This time can vary from a few years to a lifetime. A benefit to receiving a structured settlement over a lump sum settlement is that a steady flow of income is divided up for you during the structured annuities allocated time period. If bad investments are made with a lump sum settlement, then it will be difficult to spread it out over several years.

A structured settlement is tax free through federal and state levels during its payout periods, but a lump sum settlement payout that is invested is not tax free. As stated before, a few bad investments could mean a lump sum settlement will not last the duration of a lifetime. A million dollars in an account looks like it could last forever but after medical expenses and daily living expenses this lump sum settlement may not last nearly as long as a structure settlement annuity would.

The second benefit to a structured settlement is the vulture factor. Many individuals prey upon elderly people who have a lump sum of cash. A lump sum settlement can be dangerous if precautions are not taken to protect a loved one. With a structured settlement this factor will not come into play. A fixed income will provide a worry free atmosphere for the individual receiving the periodic payments.

The third benefit to a structured settlement is the expense for the defendent. Many defendents will settle outside of court to avoid the large attorney fee's usually created by an ongoing court battle. The arguement is that the defendant could win the case. This is true, but the defendent could also come out much further behind than if they just settled outside of court with a structured annuity.

The benefits of a structured settlement listed above are not the only benefits of a structured settlement. This article is meant to outline the important facts of a structured settlement.

Settlement Quotes does not create structured settlements. We are a structured settlement factoring company. Financial times change for different people at different times, we provide a service to cash out a structured settlement, offering a lump sum in return for those future payments. There are many reasons to use this option, but it is not recommended from Settlement Quotes to use this financial route if it is not needed.

What is a Structured Settlement?

Structure AnnuityA structured settlement is a financial vehicle including periodic payments, provided to the plaintiff during a personal injury tort claim in replacement for the lump sum settlement. This type of financial tool can only be setup by a licensed settlement planner. (Settlement Quotes does not create these insurance products.)

A structured settlement is setup by purchasing an annuity through a life insurance company such as Metlife or Monumental Life Insurance company. This annuity can payout monthy, semi-annually, annually, or for the lifetime of the claimint. These periodic payments are tax free and are a great source of fixed income for an individual after a personal injury tort case.

Many individuals ask whether they can receive a lump sum settlement after they start receiving their structured settlement annuity payments. The answer is no you cannot switch back to a lump sum settlement. You do have options though. Settlement Quotes provides services to individuals in this situation. We factor structured settlement annuities offering you a lump sum of cash for your structured settlement.

This is not always the best option for many people. A discounted rate will be applied to your structured settlement to figure out your present day value of your strutured annuity to calculate your lump sum settlement. Due to the time value of money you will only receive a partial amount in your lump sum. After a court approval process your lump sum payment will still be tax free.

Settlement Quotes only recommends using this financial option if you have other financial assets that can provide financial support for your family. Many individuals pay off debt, send a child to college or put a down payment on a home with the money that they receive from the factored structured settlement.

There are many advantages to keeping your structured settlement. Settlement Quotes recommends seeking the advice of a financial professional before factoring any payments through a structured settlement factoring company. A structured settlement can be used as a source of income when trying to apply for a loan. This option should be tried first before attempting to receive a lump sum.