Just because you got a structured settlement for your lawsuit or insurance claim doesn't mean you have to wait years to get the money you're owed. There are a number of companies that will buy your structured settlement quickly and give you cash. These companies can buy your remaining settlement payments or pay you cash for your whole structured settlement. This one-time payment can be used for anything you want, like a house, college tuition, business investments, or paying off debts.
What's a Structured Settlement?
A personal injury lawsuit often leads to a structured settlement. This is an agreement in which you agree to receive payments over time in exchange for letting go of your claim. You can get payments from a structured settlement in almost any way you want. One example is a settlement that can be paid over a number of years in equal amounts each year. Another way is to get payments from a settlement in small amounts every few years.
Most of the time, this kind of payment comes from buying one or more annuities from a life insurance company. Structured settlements can also be given to people who win a lot of money in a contest or the lottery, or in any other situation where a large amount of cash is given.
Structured settlements may not always be the best option.
Structured settlements are meant to give people who have been hurt some long-term financial security through tax-free payments. Most people can understand why they agreed to the structured settlement payment plan at first. But a financial emergency, a business opportunity, an unplanned medical bill, or buying a house can put a strain on the injured person's finances.
In this case, the structured way the settlement is set up could make it hard to pay for big purchases. A structured settlement may not be the best way to put your money to work, either. There are many other ways to invest that can give a much better long-term return than annuities, which are what structured settlements use. So, some people might be better off getting cash for their structured settlement payments and then starting to build their own portfolio of investments.
How to Get Money from a Structured Settlement
If you win a settlement from a personal injury case, your lawyer or financial advisor may suggest that you get payments over time instead of a lump sum. This is called a "structured settlement." Then, a third party can buy an annuity for you that will give you regular payments that aren't taxed.
Companies that buy structured settlements for cash have a number of ways for you to get access to any part of your annuity. For example, you might want to sell as few as four years' worth of payments and get a lump sum while still getting some of your monthly payments. Or, you could sell your settlement in exchange for a big payment five or six years from now. You could also make a deal to get cash for a structured settlement that fits your specific needs.
Here's how it works to get cash for a structured settlement: Say you were in an accident seven years ago. Because of the accident, you had to stay in the hospital for a few months and go to physical therapy for almost a year and a half. So, you hired a lawyer and filed a lawsuit against the person who was responsible, or rather, against the person's insurance company. In the end, your lawyer tells you that you will be given a large amount of money.
You get a very nice-sized settlement after negotiating for months or years. But the money you will get up front will only cover the medical bills you have already racked up. The rest of your payment will be given to you in regular payments over the next 15 to 30 years through an annuity. You could only get payments once a month or once a year, but you decide to contact a settlement buyer to get cash right away for your structured settlement. You can then use that money to improve your current cash flow instead of waiting for settlement payments to come in periodically.
Questions of the law about getting cash from a structured settlement
If you want to turn your structured settlement into cash, you should talk to a financial advisor. Most states have rules that can make it hard to sell structured settlements, so if you want to get cash for your structured settlement, you will need court approval. Federal rules can also make it hard to sell a structured settlement to a third person. Some insurance companies won't give annuities to people who don't work for the company.
Also, do your research before you try to get cash from a structured settlement. Check with several companies to see which one will give you the most money for your structured settlement. You might also want to look at their honesty, reputation, and past actions. This will help make sure that getting cash from your structured settlement goes as smoothly as possible.
If you need a lump sum of money to take care of your immediate needs, getting cash for a structured settlement may be the best option.
