News and Tips on structured settlement transfers.

Cash

Structured Settlement – Cash It Out?

The late-night ads beckon, promising a big lump sum settlement if you cash out your structured settlement.  You’ll get cash now, or so they promise.  Consider a few things before you sell.

How Will You Spend the Money?  You may think that you have a serious emergency on your hands that justifies selling your settlement, but do you really?  If you’re paying bills, can they wait?  Or can they be negotiated?  If you’re paying for repairs, is there any other way to take care of it?  If you’re giving the money to friends or family, can’t they get the money anywhere else?  Sometimes, with enough hard thought, you’ll find that money “emergencies” really aren’t.

I Can Beat that Interest Rate.  Your structured settlement is likely being managed and paid by an insurance company, who received a lump sum (perhaps from a defendant in a lawsuit) and is investing it in conservative investments so that you will receive guaranteed payments over several months or years.  These investments are likely very conservative and not earning a high rate of return, and you may have had financial “consultants” tell you that you can do better.  The truth is, however, that you probably can’t, at least not without taking on a huge amount of risk.  Also consider that your structured settlement is tax-free.  If you sell it, and invest the proceeds, any money you make won’t be tax-exempt.

How Long Are You Planning to Live?  Structured settlements are typically intended to provide the annuitant (that’s you) with a stream of income to meet your living expenses for a period of months or years.  If you sell your settlement, that income will be gone.  How do you plan to take care of yourself, especially if you don’t have a spouse to do it for you, or if you can’t work. 

How Disciplined Are You?  Selling your structured settlement will result in a lump sum of cash at your disposal.  This isn’t necessarily a good thing.  Even the most disciplined person would have difficulty resisting the temptation to spend a large amount of cash right away.  Even if you’re disciplined, there’s sure to be a family member or friend with some “urgent” need that can be met with a “loan.”  If you don’t have control over the money – that is, if it’s still locked into an annuity – you don’t have to worry about saying “no” to a seemingly legitimate need.

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.

Tags: , , , ,

Leave a comment