Structured settlements are generally designed to provide funding for ongoing medical needs, often as a result of accident or injury where another party is deemed to be at fault. The idea behind doling out the money over a period of years or the course of a lifetime, rather than paying out one lump sum, is to ensure that the recipient will continue to have the money needed to cover ongoing costs associated with accident or injury. But what if you need a surgery that’s going to cost a huge sum, more than your annuity will cover? Or what if you require housing in the meantime and you can’t get a loan to buy a house because you can’t work while injured? There are several reasons why you might be interested in offers to buy out your structured settlement so you can get a lump sum now while the buyer takes receipt of your annuity. But before you agree to this arrangement, you’ll want to evaluate offers to choose the one that is most favorable.
The first thing you need to consider is what you’ll get in exchange for selling your structured settlement. Do not expect to get full value. The benefit you receive is gaining access to a large, lump sum of your settlement now rather than having to wait for years to collect it in full. The trade-off is that you will lose a percentage of the long-term value. But how much loss is standard? The truth is that it depends on a number of factors, including the value and length of your settlement, the company offering the buyout, and honestly, what you’re willing to accept. But there are a couple of other things you need to consider.
Have you thought about taking out a loan for your cash needs? If you need money now, you can take out a loan and pay it off over time with the money you receive from your annuity. Yes, you will pay interest on the loan, but you should run some numbers to determine whether the interest payments will come out to more or less than you’ll lose by accepting a buyout. You also need to think about why you want a lump sum. If you have a pressing need, such as medical bills or homelessness, it makes sense to get your money now, even if you lose some in the long run. But if you want to use it to buy a car, take a vacation, or otherwise spend it frivolously, you’re probably making the wrong choice. After all, that money is for potential future needs. What will you do if you need it and it’s gone?
There are valid reasons to agree to an annuity buyout. But before you take the money and run you need to address why you need it, whether or not there are better options, and what you stand to gain and lose in the process. If you have done your homework and you decide that making a deal with a reputable agency like Dolphin Asset Group is the best route, then by all means sell your structured settlement and put your money to good use bettering your life, as it was intended.