If you settle or win a personal injury case, you may have an option of taking your award as a structured settlement, which is a series of payments over a period of time.
Experts at We Pay More Funding to say that structured settlements are usually designed to consider your future income requirements. This includes your income, ongoing medical bills, and other financial obligations.
However, structured settlements can’t account for every financial problem. For example, your settlement may pay you $1,100 every year for 30 years, at some point, you might wish to tap into the value of future payments to cover large financial needs.
How Much is Your Structured Settlement Worth If You Sell Now?
When selling structured settlement payments, companies will give you a price depending on the future value of payments, factoring in various projections over time.
Those companies calculate the discount rate depending on several factors, including the value difference between future and current money.
For example, a settlement payment of around $1,100 today could be worth less within one year due to inflation. As far as “sell my structured settlement” is concerned, the buying company will purchase that amount depending on what they expect to be worth, not what it is worth currently.
It is Possible to Get Cash from Your Structured Settlement Faster
Financial entities and courts usually award structured settlements in cases where a large amount of cash is awarded to recipients. That amount is broken into smaller portions and paid on a predetermined periodic basis. Taking a structured settlement instead of a lump sum can be a great idea.
It will serve as a safety to ensure you have enough income over time and don’t quickly lose what was awarded to you. That is why it is regarded as a solution if the person’s ability to get income is affected.
Personal injury awards, product liability issues, and wrongful death suits are legal cases that could end with an individual being awarded a settlement payment.
For some people, situations change, and they might need more cash than they thought. This cash is not slated to come early enough to meet their needs. In such a case, they may turn to cash out their structured settlement payment by way of selling their future payments for a lump sum.
Some individuals with pressing financial requirements decide that it is worth taking lump-sum payments upfront, although it will mean collecting less cash than what their annuity would’ve paid out over the time frame that was sold.
Your accountant or lawyer should be consulted if you decide to sell a structured settlement to ensure everything in the deal is in your best interest.
It is worth noting that, although rare, a structured settlement payment can serve as collateral for lenders. However, this can be difficult because this is also considered a transfer of rights and must go before the court to be allowed. So most lenders shy away from it.