Selling structured settlements could allow you to transform a steady periodic payment stream that would be paid to you over time into a discounted lump sum of money. Most individuals get a structured settlement annuity from insurance firms because of personal injuries and other lawsuits, like medical malpractice or wrongful death. This kind of annuity is typically tax-free – meaning it is not necessary that you pay income tax, whether you choose to sell part/all your annuity or stick with the periodic payments.
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How Structured Settlements Work
After a structured settlement is negotiated, a court order will typically request the money to be placed into an annuity. Basically, annuities are an irrevocable stream of payments from insurance firms structured in a manner that the court approves.
A structured settlement annuity can be arranged in multiple ways depending on the negotiations and court order. Structured settlement payments are irrevocable and guaranteed by the insurance company. They are highly regulated for good reason – to protect the interests of the annuitant who was awarded the money due to some form of injury caused to them.
Not every settlement agreement is structured in payment schedules. At times, settlement cash gets paid out in lump sum amounts in the settlement agreement. Although keeping monthly payments will give you a stream of income over time, you may opt to sell my structured settlementoption for financial events, such as the following:
- Buy a Home
Whether you are starting a family, married, or single, going from a rental house, condo, or apartment to a home you own is a great step. Typically, it is quite often the largest investment a person will make. After many years of paying rent and not gaining any equity in a property, homeownership will mean the individual will have something tangible to sell in the future that has hopefully increased in value from the time of purchase. One of the greatest obstacles to purchasing a home is settling a down payment. The amount you will pay is a certain percentage of the total price of the home you wish to buy, and the precise amount is based on the kind of loan you go for. Also, depending on the size of your structured settlement sale lump sum amount, you may be able to purchase the property with no mortgage at all.
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- Clear the Debts at Once
If you have debts, selling your structured settlement annuity can provide the finances required to enable you to pay off the outstanding balance and get back on your feet. By selling annuity payment, an individual having a financial issue can get the cash they want to resolve their financial problems.
- Purchase a Car
The capability to move around independently opens up a tremendous amount flexibility and opportunity in one’s day to day life. Unfortunately, some Americans don’t have this privilege. Buying a vehicle opens a lot of opportunities for you. If you have a structured settlement annuity, you may be able to tap into the value of it to help purchase a vehicle be selling some of the future payments for a lump sum of cash. Instead of waking up early to catch a bus or train to go to work, you could have your own car to take you from point A to B.
A structured settlement annuity benefits plaintiffs by guaranteeing them that they will get a steady income over time. You can always try to sell your structured settlement annuity to buy a car, pay off debts, or purchase a home if you find your self in a position of need to do so.