subject: Obtaining Cash for Annuity Payments Can Pose Risks to Personal Finances [print this page] Obtaining Cash for Annuity Payments Can Pose Risks to Personal Finances
Obtaining cash for annuity payments is a complex matter that requires the services of a structured settlement specialist. Approximately two-thirds of U.S. states prohibit the sale of annuities, so the first step involves contacting the company who manages the structured settlement or a lawyer who specializes in this niche.
Cash for annuity payments is provided through a funding source. This might be a private investor, investment group, or structured settlement cash advance company. It is crucial to understand the process for selling future annuity payments and to carefully investigate the funding source you plan to assign future payments to.
Annuitants receive lump sum cash in exchange for payment rights. Depending on state law, annuity payments can be sold in whole or part. Most people only sell a portion of future payments. When court authorization is required, Annuitants are rarely authorized to sell their entire structured settlement.
Structured settlements are often used to compensate individuals who have been injured and require long-term medical care. When injuries prohibit individuals from earning a wage, structured settlements include monetary awards for lost wages. Courts will not allow Annuitants to obtain cash for annuity payments when doing so will disrupt their standard of living.
Prior to seeking out a funding source, Annuitants must determine how much cash they require. People choose to sell structured settlement payments for many reasons. The most common include paying off high-interest loans, medical bills, and college tuition. Other reasons for selling include obtaining cash for investment purposes and starting or expanding a business.
The note investor will need to verify information pertaining to the structured settlement in order to provide an offer. Annuitants should be prepared to provide the name of the life insurance company which guarantees annuity payments, along with the amount of each installment and scheduled payment dates.
Funding sources review the information and present various payment options. Structured settlement specialists often work with several annuity buyers and will strive to obtain the best offer for Annuitants.
Once the offer is accepted, Annuitants sign and notarize payment assignment documents which are sent to a factoring company who facilitates the underwriting process. Afterward, the transaction must be approved by a judge. Finally, the funding source distributes lump sum cash to the Annuitant. When the last sold payment is sent to the funding source, payment rights revert back to the Annuitant.
Take time to conduct thorough research before attempting to obtain cash for annuity payments. Consult with note buying companies or a structured settlement attorney to determine if this is the best financial decision.
