CASH FOR A STRUCTURED SETTLEMENT
We all are humans, and there is no doubt that we are imperfect. Some work requires perfection, and just a tiny error can spell a disaster. Not every time things go smoothly as planned, and this can result in something horrible. The worst result can be someone’s demise because of someone’s error. That is a significant loss, right? We all have heard health is wealth, and that person just lost his health. Even if someone is injured because of someone’s mistake, it is a pretty bad scenario. What can that person do to come up with his/her mistake? One option is to pay them cash for a structured settlement.
After hearing “structured settlement,” many people get scared because they think it is complicated and hectic at the same time. As a matter of fact, it isn’t, structured settlements are pretty simple. Sometimes, this whole process is handled by your insurance company. On the other hand, the receiver has so many options for using that structured settlement. He/She can use that structured settlement, sell it to receive lump sum cash for a structured settlement, sell partially, and many more. In this article, we will tell you how you can get cash for a structured settlement as well as how structured settlement works?
What is a Structured Settlement?
Let us create a scenario. There are two parties, party X and party Y. The party X just hit the party Y while driving. Party Y is in critical condition now. Furthermore, party Y does not have much expense for an operation. To make things right, party X decides to pay cash through a structured settlement to overcome the damage. The party X will be paying the party Y a stream of money in a scheduled manner.
A structured settlement is a tax-free lawsuit as well as a negotiated settlement through which the wrongful party pays a stream of payments to the injured party as compensation for damage. Except for personal injury, you cannot use a structured settlement for any other case. The annuity will provide the victim with a stream of payments over time. Below are some examples where the wrongful party can pay cash through a structured settlement.
- Road accident
- Workplace accident
- Pharmaceutical drug side effects
- Slip and fall
One of the most significant advantages of a structured settlement is that it is tax-free income. It means that the injured party’s payment will not need to pay any kind of tax. In a few cases, even if the victim is demised, the structured settlement continues, and his/her family get all those payments. For that, the victim needs to name the beneficiary in the instance of his/her death. However, many people reported that the amount is deficient. This payment does not fulfill their needs, so they take the next step to get cash for a structured settlement.
History of Structured Settlement
A structured settlement was founded in Canada. In other words, the structured settlement started in Canada. In the 1950s and 1960s, a drug called thalidomide was used by many pregnant women. To repair the damage, the company decided to pay all the victims with money, and hence structured settlement was born. It was the best alternative to lump-sum payments.
How to Get Cash for a Structured Settlement Faster
There are many ways to utilize a structured settlement. Before you start reading how you can get cash for a structured settlement, you should first analyze your case. If you do not need money urgently, then getting payment from a structured settlement might be the best choice. With a structured settlement, you can get cash for the rest of your life without doing anything. On the other hand, if you need money urgently to pay the college fees or you want to pay your debt, etc. then you can consider selling your structured settlement.
There are a few companies out there who are willing to buy your structured settlement for a lump sum. Many people, who suffer from the financial crisis, choose this option because they need money urgently. However, there are some people as well who do not need money urgently, but yet they still want to sell it. We suggest you first contact your financial advisor if you do not know what to do. Your financial advisor will surely help you to make this decision.
You Can Get Cash for a Structured Settlement Faster
Courts usually award the victim with a structured settlement when the money is in a large amount. It helps the wrongful party to pay quickly. It breaks the whole sum into affordable parts, which will be received by the injured party over time.
In several cases, the money received from the structured settlement is not enough. Sometimes, the injured party requires a large amount of money. In short, they are looking for a lump sum. There is a method to get cash for a structured settlement. The victim can sell the structured settlement to a potential buyer who will, in return, offer the victim a lump sum. This lump sum amount can help the injured party to fulfill their needs.
The lump-sum amount has its pros but with some cost. Below are all the pros and cons for a lump sum payment:
- The victim will have immediate access to the money
- It will fulfill all the needs
- Helps to get out of a financial crisis
- It is just one-time payment for a cost of lifetime payments
- The payee will not have any control on the structured settlement
- Forfeit future payments
- The injured party will be paying a discount rate. It means that the party will receive less than the worth of the structured settlement.
Why Do People Prefer Cash for a Structured Settlement?
Not every time it is the case of an emergency. Some people prefer selling their structured settlement instead of getting the payments periodically.
When we talk about emergency cases like credit loans, surgery, or other medical costs, we know that these cases require a lot of money. Even with the structured settlement money, it will take you ages to pay that huge amount. In those cases, lump-sum payment is a good idea.
Another reason why people prefer cash for a structured settlement is that they will not pay any kind of interest rates associated with the loan. On the other hand, some want to sell their structured settlement because they think that the payments are not reasonable. They peruse for selling their structured settlement to get the lump sum amount.
In a few cases, some people are looking for a lump sum, but at the same moment, they do not want to sell their structured settlement. They end up selling a part of the agreement. It might be the best decision. They get the lump sum amount, and at the same moment, they can continue to get those payments after a period.
Cash for a Structured Settlement
Before you start reading how to get cash for a structured settlement, it is necessary to look at your situation and think. Sometimes, people regret choosing a lump sum over a stream of payment for their lifetime. Ask yourself that do you require a lump sum or not? If not, then continuing the structured settlement might be the best decision. On the other hand, if you need a large amount of money urgently, then selling your structured settlement might be the right decision.
In short, you need to think carefully when you are taking this step. Look at your surroundings and think of your future, whether lump sum will help you more. Once you have decided that you need to get cash for a structured settlement, proceed with all the steps below.
How to Get Cash for a Structured Settlement?
To get cash for a structured settlement, you need to sell all your rights to the buyer. It means once you sold the structured settlement, you will have no control, and you will not receive any more payments. The buyer will provide you with a lump sum amount in return.
Let us create a scenario. You own a structured settlement. You will get $20K every year for the next ten years. After five years, you find yourself in need of money. Therefore, you decided to sell it partially since you cannot wait for the next payment. You researched for the right buyer and eventually found one. The company offers you a $10K lump sum for the following two payments (the payment of the 6th and 7th year). Once you paid both payments to the company, now you can continue to receive the cash from the structured settlement. It means that by the 8th year, you can continue receiving the payments after every year.
Process of Receiving Cash for a Structured Settlement
Selling structured settlement might look complicated, but it is not. As a matter of fact, it is pretty simple. If you follow all the steps, within 40 to 80 days, you can quickly sell your structured settlement without any hassle.
First of all, you need to research a suitable buyer. Many companies are willing to buy your structured settlement. You need to search for them. After the research process, now reach to them to get a free quote. Getting a free quote is a crucial step to sell your structured settlement at a reasonable price.
Furthermore, it is okay to get a free quote from different companies. You can even tell all the companies that you are getting free quotes from other companies. In this way, you might get a good quote since the buyer will know that you are contacting other companies. Get at least two free quotes.
The next step is to analyze that data. Check which company is offering the best rates for your structured settlement. What you need to check is the discount rate. The discount rate is the difference between the worth of your structured settlement and the offered rate by the buyer.
Once you analyzed the data accurately and selected the best quote, now it is time to move forward to the paperwork. Of course, you cannot sell your structured settlement without doing paperwork. You need to sign a couple of paper which will say that you are selling your structured settlement to a third party. Make sure that you read the whole terms and conditions before signing. Always keep a copy of these documents with you so that you do not get into trouble. Attach a copy of your original structured settlement agreement with the selling agreement.
Receiving Cash for a Structured Settlement
Once you do all the above steps, this might be your favorite part. Now you can receive the lump sum that you have been waiting for. Selling off structured settlement takes at least 30 days; you cannot expect to sell it within a day or two.
The insurance company that issued the structured settlement needs to approve the sale of your structured settlement. The insurance company will accept the transaction once they find that the deal is legitimate, and the buyer has a fantastic reputation.
In a few states, they allow you a cooling period. It is the period where you rethink your decision. It is a significant step to avoid mistakes. However, in other states, you will need to get a professional assessment of the buyer’s sale. Make sure you contact your financial advisor to learn more about these different laws.
Selling a structured settlement is easy, but before you even proceed, you should think about whether it is necessary for you or not? You will be surprised to know that often people make this mistake and regret it for the rest of their lives. If you follow the above guide, you will end up selling to the right buyer, and you will get a handsome amount of money in a lump sum. Remember, to work with patiently, take your time, do not work with haste; otherwise, there is a high chance that you make a wrong decision.