The Advantages and Disadvantages of a Structured Settlement
There are a few who would like the structured settlement payout the same way someone would want to buy it. But there are advantages and disadvantages to the same. Before taking a call to sign a document that would make the settlement holder purchase a part of his settlement payments, you need to first understand what it would take to do so. First of all, if you have a person who needs money right away but is not necessarily, in financial need, then why not just give them what they will in need. Pit this situation against the typical settlement holder who just works as a regular employee and needs to get paid yearly or monthly from the proceeds of the settlement? An extra fifty or eighty thousand awarded over a period of years would be useful to him, yet he just doesn't need the money right now. Maybe he has the right idea or perhaps he just needs money for health reasons or perhaps he just would like to invest at the moment in order to offset losses.
He can be a regular employee and know that he will get the money all year. But if he wanted a lump sum, he would have to sell of part of his settlement for that purpose. There are ways to structure it. This would be the next step of selling off the remaining funds for a huge amount. But there are also ways in which a structured settlement buyer can help you with. By purchasing structured settlements like a life insurance policy, a purchaser might be able to give all the funds up front. The balance would be paid out that way over thirty years. Another option is to Include the settlement as an equity Position which means that you would be in a profit on every investment made. Keep in mind that both options come with risks. The riskier it is, the more you are going to get paid. The safer choice is to take the safe bet and get the settlement money up front. The only problem is that your settlement is going to be discounted by the discount rate. If you want to protect that discount rate, it is wise to shop around. Ask as many companies as you can, to see if they will compete for the purchase.
It also might be wise to figure in the discount rate when figuring out what is the best option for your situation. The best option in the situation where you want immediate and significant monetary benefits is for you to sell a portion of your settlement. The responsible party will feel a sense of loss to give up some of the money, but in the long run, the money will be worth it. Getting a large monetary bonus after a long term of employment is welcomed by just about everyone. If you choose to get a high discount, you may find a large buyer. Just find a sufficiently large purchaser and they will be willing to make the high settlement deal. You can also get the help of a competent intermediary who may be willing to give advice on the process and possibly take you through. There are inherent dangers in selling a structured settlement of this nature. Working with a trusted professional would be advisable. You have the right to a fair and honest price for the settlement. Don't be fooled into thinking that this deal will go away if you don't have immediate access to cash. Understand that the structured settlement buyer will be paid in full from the purchase of your settlement.