A structured settlement occurs when a a law suit is resolved in which a claimant wins his case and and damages are awarded to him. One option that the parties can pursue is set up a stream of scheduled payments instead of a lump sum of money. Such an agreement is called a structured settlement.
This usually helps both parties, as the defendant can hold on to their money for longer and invest the money they owe, and the claimant gets a guaranteed stream of money for the life of the structured settlement. In most cases, the claimant would receive tax advantages. In some cases, the claimant might even be fully exempted from tax! Structured settlements are usually good sources of money for claimants as they get solid regular cash flows throughout the life of the settlements.
However, what happens when suddenly you are in need of a large lump of money, and can not wait for monthly installments to come? You can not force the payer to pay sooner, as you agreed to their payment terms.
Because structured payments are really reliable, many third party investors would be interested in buying your annuity for a fixed lump sum of money. The amount to be received will be somewhat lower than the face value of the annuity – which will be the third party’s profit.
If you you already own an structured settlement, that is great for you. Structured settlement are extremely reliable, flexible and secured monetary source that can be easily transferred when in you are in need for a large sum of cash. In fact, many other types of annuities other than structured settlements can be transferred to third parties for a lump one time price. Usually, the rate you get depends on the type of your contract and reliability of your payer.
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