If you have ever been injured in an accident, you know that there are all kinds of legal hoops to jump through. Not only will you be dealing with numerous insurance companies, but you may also be dealing with several lawyers as well. In the end, you will likely receive some sort of compensation from at least one insurance company. Many times, this monetary compensation will come in the form of a lump sum payout. However, there are times when an insurance company elects to pay you using a structured settlement annuity.
What is a Structured Settlement Annuity?
A structured settlement annuity is one type of insurance settlement. Instead of paying the settlement out as a lump sum payment, the insurance company designs a contract where the damages for your personal injury are paid out over a stated period of time. This benefit is payable to you or to a beneficiary in the case of your death.
While some would argue that it is beneficial to have the payments spaced out over a period of time, others may wish to have the money from their damages all at once. There are any number of things that people can do with a large windfall of money. They can use it to pay off any outstanding debts. They can save it. They can even invest the damages to make money off of their money.
Selling a Structured Settlement Annuity
“I believe that I could receive a larger return if I was able to collect all of my damages upfront and invest them. Is there any way that I can sell my structured settlement?”
Indeed you can. There are several companies that buy structured settlements. They will give you cash upfront for your settlement so that you have the cash in hand. From there, you can decide how you wish to spend, save, or invest your own money.
Advantages of Selling Structured Settlement Annuities
There are a few advantages to selling a structured settlement annuity. As with the payments from a structured settlement itself, the sale of a structured settlement should not result in any tax obligation. Furthermore, you have more control over your own settlement money. Rather than continue to let interest accrue over time, you can actually save money in interest by selling your structured settlement and using the cash to pay off debt. Perhaps you’d like to buy a new house or invest that money in mutual funds. By selling your structured settlement annuity, you have the option of doing that immediately.
How Does it Work?
“OK, I’ve decided I want to sell my annuity. Now what?”
All you have to do is choose a company that buys structured settlement annuities. Decide whether or not you want to sell all or part of your annuity. Then, the company will auction off your structured settlement annuity to the highest bidder. Keep in mind, the company will charge you a fee for their services. This will come out of the money from the annuity that you are selling.
While selling a structured settlement annuity may not be the right course for everybody, it is an option for those who would like to have instant control over their personal injury settlement. Not all structured settlement annuities are able to be sold, so please check with your chosen company to see if selling your structured settlement is an option. As always, make sure you know all advantages and disadvantages of such an agreement before you sign on the dotted line.