NoStructured settlements and annuities are financial products that you are probably happy about. In the first case, you probably received your structured settlement after going to court. The defendant knew that the case was lost, so rather than go through the motions of a court case that couldn’t be won, they opted to settle with you out of court.
Because a settlement is a lot of money to pay all at once, many times the defendant’s lawyers will offer you a structured settlement. They may even push it on you. In most cases, a lump sum should be available to you from the start, but a lot of plaintiffs feel that they received their structured settlement as the only available option, even if the monthly payments would not be sufficient to cover their monthly lifestyle needs.
Annuities are not quite the same thing. Unlike a settlement, you plan for an annuity well in advance. It is meant to cover your lifestyle expenses during your retirement, actually, or some similar time period. You, or a caring loved one, has been putting money away for a long time to fill up the annuity.
Now, the only reason that an annuity might not be working for you is that things in life don’t go as planned. Perhaps your health has taken a bad turn. Maybe you have a very costly household repair to cover. Maybe someone you love needs to go to school or start a business. With expenses like these, unexpected as they may be, you won’t be able to cover them simply with the money coming through your annuity.
So what are your options? In either case, you will be able to sell your product for a lump sum. This won’t be carried out with the financial institution with whom you have your structured settlement or annuity. It will be with a third party company who will buy your product somewhere below its full value.
If I am selling my annuity payments, I am looking around for a lot of different options. I’ll call around to a bunch of different companies. Because I know the value of my annuity of structured settlement, each company will be able to make their offer quickly. And they won’t all be the same. I advise that you do like I did in the example, and get a bunch of quotes before taking only the best one.
But this isn’t the end of the story. If you want to sell your structured settlement or annuity, you’ve still got to run the decision by your presiding state court. Since George W. Bush’s administration, state courts have had the final say over the sale of these products, and their rules are somewhat strict. You can’t just sell for any reason.
You have to sell for a purpose that will benefit you in the long run, at least as much or more than the monthly payments themselves. Examples include: paying off a high interest debt, going back to school, or buying a house, but there are plenty others.
You can’t go on vacation or any other frivolous uses of the money. At this point you understand how this works and likely know if selling your structured settlement or annuity is right for you.