Courts award structured settlements typically in the case where a lot of money is offered to recipients, and the total value of the settlement is paid out over time in periodic annuity payments until the full value has been paid.
In the case of a wrongful death or accident, taking a structured settlement instead of lump sum money could be a great idea at the time.
Typically, this serves as a way of ensuring that you have a stream of income coming in for a longer term rather than an upfront lump sum. That is why these options are regarded as a solution in cases where an individual’s capability to get income was harmed.
For some people, situations change, and they may require cash sooner than they anticipated. And this cash is not slated to come early enough from their future structured settlement payments. This explains why some individuals choose to sell annuity payment and access the value of their future payments quickly. It is important to note that the annuitants will receive less money if they choose to sell then they would have received through their normal annuity payments.
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How getting Lump Sums Work
Structured settlement annuities are the source of billions of dollars in annual payments to tens-of-thousands recipients every year. Recipients can consider cashing out their future annuity value by selling the future payments at a discounted rate in the case of emergencies or when there is a need for a substantial amount of money.
Things such as car troubles, debt, business capital, investment opportunities, tuition payments, home repairs, and medical emergencies are some of the common reasons that you will see people reach out to structured settlement companies to access lump sum payments by selling their future payments.
Typically selling a structured settlement involves factoring companies which specialize in this type of transaction. You may liquidate the whole settlement or a portion of it when selling. As a recipient, you can also choose how many and much of your future payments that you’d like to sell based on your needs.
Steps for Getting you Lump Sum
Getting funds quickly to deal with your financial issues is not a simple and quick process. It requires a lot of planning, especially on your part, to ascertain that you get the most value for your structured settlement. In general, some of the steps you will take along the way when selling include:
- Finding reputable factoring companies
- Choosing a quote
- Getting approval from the court
- Receiving the value of your lump sum
How Much Cash You Get from your Lump Sum
The total amount of money you receive for your future structured settlement payments depends on several factors. This includes the size of your payments, the number of payments and when the payments occur. As well as various fees and the factoring companies margins in the deal.
It is worth noting that if you invest your lump sum, for example into a business or property, wisely you may be able to significantly grow the value of that money.
In a Nutshell!
Structured settlements are one of the methods to dispense compensation amounts to injured victims during a settlement. Choosing whether to get your injury settlement in the form of a structured settlement or lump sum is a decision that will be made in as you work through the settlement agreement.