What are the Benefits of Selling My Structured Settlement?
If you are the recipient of a structured settlement, you may have heard ads for structured settlement buyers. Selling structured settlements can be a great way to raise cash quickly if you need it now and can't afford to wait for your structured settlement payout. Companies that buy structured settlements use this money to create other financial products that they use to generate a profit. These structured settlement buyouts can be a bit confusing, so we're here to help you understand the benefits you get when you sell your structured settlement.
The most obvious benefit of a structured settlement cash out is that you get cash on hand to use for whatever it is that you need, medical bills, car or home repairs, college expenses, or anything else. When you sell your structured settlement you get the opposite of a structured settlement: lump sum money. Companies buying structured settlements pay in cash. Structured settlements can take a long time to pay out, and if you decide to sell structured settlements then you will have the cash up front. However there are some important factors to keep in mind.
Factors to Consider
The first factor to consider when selling a structured settlement is the discount rate the buyer is offering you. The discount rate works like an interest rate, and is what allows the company to turn a profit. This means that they offer less than the full value of your structured settlement, and then use your structured settlement money to reinvest and offer other financial products. In return for this you get cash. Structured settlement provides assured income, however. Moreover, structured settlements are usually designed to payout money when you are going to need it the most, either at age milestones or when medical complications are expected. Taking a structured settlement buyout now will mean that you won't have access to this income later, which may be when you need it the most. This is why it is important to discuss the sale of your structured settlement with a certified financial advisor or planner to ensure that it is really in your best interest. Also you should make sure that the amount of money that you'll lose from the broker's discount rate won't negatively impact your long term financial plans, or the needs of your family or loved ones. Performing this due diligence will help you decide if the benefits of cash structured settlement are right for you.