subject: Is It Time To Sell Your Structured Settlement Or Annuity? [print this page] Regardless of the reason why you have a structured settlement or annuity, there will always come a time when you are tempted to sell these claims and have the lump sum all at once. The purpose of selling a settlement or annuity varies from most important to the least important ones. And identifying your need for a lump sum amount out of your settlement or annuity will help you settle on which decision to make.
A structured settlement or annuity is a binding contract between two parties where the defendant or payer agrees to pay a certain amount of money to the claimant or payee in deferred or staggered method. The payment could be in lesser amount for a longer duration, or the amount is higher but in shorter period of time. Usually the agreement would depend entirely on the capability of the payer in terms on paying such an agreed amount to the payee. Once the details are agreed upon, a contract will then be forged as a binding agreement.
However, the need will always arise from the payee's end in terms of the finances. It could be that he needs to undergo a medical surgery that requires a huge amount of money, or that he needs to pay his mortgage to ward off an impending foreclosure, or he may need to pay his child's tuition. These reasons are valid, and thus require a huge amount of money. In situations like these, the payee may now consider to sell his structured settlement or annuity to a purchasing company. The company will buy off the settlement and provide the lump sum amount to the payee. The company's ROI comes in a form of discount, which means that if the structured settlement is worth $100,000 a certain percentage out of that whole amount will be deducted as the company's returns. The payee will not receive the whole amount of $100,000, but the good news is that he won't have to wait until the duration of the agreement to have the money.
For a claimant, he must be sure enough that the lump sum amount will be put into good news before he could justify his need to sell. The best thing to do will be to refer the situation to a reliable company to know the real deal of such a course of action.
