You receive monthly payments from a structured settlement or a lottery payout. When you first won the funds, you had the option to choose all of your money in a lump sum or structured monthly payments each month. You were likely encouraged to choose the monthly payments, and you were given many reasons why that was the best option. It might have even been the best option for you at that time. However, if your needs have changed or your financial situation has changed, those structured settlements may no longer be the best options for you. What changes might warrant the need for a quick cash option?
Your cash needs may have changed. Perhaps you lost a job or you took a pay cut. Maybe your spouse is in between jobs and you are now struggling to pay the bills. Perhaps your child is headed to college, or is simply growing so fast they need all new shoes and clothes. Maybe there was a home emergency and your house needs major repairs. There are many daily emergencies that can arise in our everyday lives. The cost of living has also continued to increase. Household income has grown by 26% in the past 12 years, but the cost of living has gone up 29% in that time period. You could surrender your structured settlement payment and receive cash for a settlement, but you are likely to be left with penalty fees. Why should you have to pay high penalty fees on your own money?
Your other option is to sell your settlement and gain access to your settlement cash. It is wise to sell annuities (rather than surrendering them) to avoid surrender charges; surrender charges are explained in your annuity contract and they typically range from 7 to 15% of the amount you plan to withdraw from you annuity. Additionally, one advantage of selling your annuities is that you can get large amounts of cash now instead of waiting five, 10, 20 or more years for an annuity to reach maturity. When you need extra cash, you can receive cash for a settlement with a small fee. The fee will be much smaller than if you were to surrender or give up your settlement.
Basically, someone will be lending you the money in order to receive cash for a settlement. The structured annuity payments will go to them, and you will receive your cash in a large lump sum for all of your cash needs. It is an advantage for both parties. A quote will be provided to you, lining out the financial information that is involved with selling your settlement.
A structured settlement that may have worked for you before may no longer be working for your financial or personal situation now. You could surrender your structured settlement and receive cash for a settlement, but then you will be stuck with penalty fees that can be quite costly. Instead, you are able to sell your structured payment for your cash in a large lump sum, for much less in fees.