A structured settlement allows you to receive your settlement as an annuity rather than as a lump sum. This provides multiple benefits, such as tax advantages and receiving money when you need it. You also have the option of selling your structured settlement. This will allow you to receive money immediately to pay for current financial needs. There are a few things that you should consider before selling your structured settlement. Here are some things to consider before selling to a structured settlement buyer.
Discount Rate
If you sell your structured settlement, you won’t receive the full amount of the settlement. The sale works similar to an interest rate. Buying your structured settlement for less than the full amount allows the buyer to reinvest and turn a profit. While you won’t be receiving the full amount of your settlement, you will be able to receive cash immediately to use as you need. This might be needed to pay medical bills, renovations, college tuition, or any other debt you might have accumulated.
Need of Money
The most common reason why someone might sell their structured settlement is that they have a debt that needs to be paid. A structured settlement is designed to pay out over an extended period of time. If a personal injury causes the need for medical attention well into the future, this ensures that you’ll have money available. Before selling your structured settlement, you should consider your immediate need for cash. If you are unable to pay certain bills that are due, this might be a good decision. If you are simply looking for a cushion and don’t require the money now, you might want to consider keeping your structured settlement. This will ensure you can pay your medical bills when they come due later on.
Financial Plans
When you receive a structured settlement, it’s a good idea to use a financial advisor to create a financial plan. This can either be for your future or that of your family. This will ensure that you get the most out of your settlement. It could potentially set you up for greater financial success later in life. If you’re considering selling your structured settlement, you should consider how it will impact your future financial plans. If you are not in desperate need of money immediately and it will negatively affect your plans, you might want to consider holding onto the settlement. A financial advisor will be able to help you make this determination.
Selling your structured settlement will allow you to receive cash immediately rather than receiving the settlement over a number of years. Before deciding to sell your settlement to a structured settlement buyer, you should consider these things to ensure you’re making the right decision.