4 Times it is Better to Sell Your Structured Settlement


Cash for your structured settlement

Do you receive monthly payments from an annuity settlement? Perhaps you won the lottery, or inherited an insurance annuity, or received it a lawsuit. Whatever the reason, getting the small monthly payments it’s probably something you aren’t complaining about. Sometimes though, life happens and selling an annuity settlement for a large sum of cash becomes more beneficial than taking small payments over a large span of time.

If you are considering selling an annuity settlement, you may have heard a lot of negative press about it. We agree to some extent, selling an annuity settlement to treat yourself to a luxury shopping spree or take a trip to Disneyland may not be the best idea for your future financial security. However, there are situations where selling an annuity settlement makes more sense than receiving small payments over a long span of time that don’t significantly improve your life. While no one but you can determine the best financial move for yourself, here are a few situations where selling an annuity settlement is a good move:

  1. Getting out of debt. If your monthly annuity payments, as well as any other income you have, are consumed by minimum payment on your debt you may feel like you’re drowning. Sometimes, it might feel like the only way to get out of the black hole of debt is through bankruptcy. However, you will lose any assets that you have by filing bankruptcy. This includes your home, your cars, and your structured settlement. Rather than file bankruptcy, selling a structured settlement is a good way to give yourself freedom from all of those minimum payments that are killing you, while allowing you to hold onto your assets.

    Even if you aren’t at the point of desperation that you are considering bankruptcy, if your debt is accruing interest at a higher rate than your structured settlement is, you are literally losing money by letting it sit and collect dust. In cases like this, selling at least part of your structured settlement to pay off high interest loans is a good idea.

  2. To make a better investment. Your structured settlement is probably growing interest at a certain rate, however, if that interest rate is not very high, you could be making more money with a higher yielding investment. In fact, money that is not working for you is considered “dead money.” While it sits in a bank account that you have no access to, the power of inflation reduces its value; so you’re losing money by not using it. Taking that money out and putting it somewhere where it can grow faster might be a good idea.

  3. To put tools in your tool belt to make more money. Let’s face it, the small monthly payments you get a not enough to live on. However, it is possible to take the lump sum from selling an annuity settlement and give yourself the skills or resources to make a good living. Some people sell their annuity settlement to put themselves through school, which costs an average of $31,000 per year, but having a higher degree provides an average increase in income of more than a million dollars over the course of a lifetime. Other people choose to use the money when they sell their annuity to start, buy, or grow a business. The average cost of starting a business is about $30,000, but can give you so much more money than the value of your annuity.

  4. To buy a house. The money that you spend on rent is money that you will never see again. You are basically flushing it down the toilet. However, the money that you spend on your mortgage when you buy a home gives you equity, and you will see it again when you sell your home. If your monthly annuity payments are less than your rent, then taking a lump sum and using it as a down payment to buy your own home may give you a lot in money in the end.

Your annuity is designed to help secure your future financially. In some situations though, you are better off by selling it. Only you can make that decision for yourself.

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