Structured Settlement Company: Paying for Flexibility and Control

2007-03-08 10:33:40

( Financial )



SELLING YOUR STRUCTURED SETTLEMENT

A structured settlement company provides financial solutions to those who have a structured payment arrangement by virtue of winning the lottery, a lawsuit, an insurance claim, or any legal structured settlement that entitles them to receive an amount of money that is paid over time.

People who want to sell structured settlement in exchange for a lump sum of cash go a structured settlement company. The structured settlement company will buy your structured settlement for an agreed amount in exchange for owing the rights to the payment contract.

Why would anyone want to sell their rights to a structured payment contract? Because most of us prefer to receive a lump sum as opposed to the staggered or installment arrangement of a structured settlement. Most people find that receiving a one time, lump sum payment provides more flexibility than receiving a small amount over a period of time.

PENSION-LIKE GUARANTEE VS. CONTROL

A structured payment works like a pension, where you are guaranteed to receive money on a regular interval. However, while this may work for some, there are people who like to receive the cash in bulk to be able to have more control over the money. You may want to use the money to open a business, close all your debts, make major purchases like a new house and car, or just have the money to be used as you will.

A structured settlement company buys your structured settlement at a price that is lower than the face value of your entitlement. This is how the earn money from the deal. A structured settlement company computes the total amount you are entitled to receive and subtracts this from the amount you have actually received. This value is the basis of how much the structured settlement company is willing to pay for.

While you may end up receiving less if you sell your structured settlement, the flexibility of having a lump sum more than makes up for the loss.


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