If you happen to be a beneficiary receiving payments for a structured settlement, due to a medical malpractice, or personal injury case, you may have the option to get cash for the annuity. There are many settlement buyers eager to offer cash for structured settlements. Many courts work with claimants that had been awarded an annuity payment schedule to allow them to receive a lump sum of cash for their structured settlement, if it serves in his or her best interest.

Cash Payment

Many ethical and reputable settlement buyers offer cash for annuity payments every day. They offer competitive bids and quotes based on the worth of all of the remaining payments. By choosing the right company, the injured party can obtain a lump sum of cash for the remainder of their payments when selling structured settlements, in as little as 90 days.

State Law Restrictions

Not every plaintiff is offered the option of selecting to receive a lump sum of cash or a structured settlement annuity plan that provides monthly or annual payments. Many states require that a specific amount of damage awards be paid to the injured party through an installment plan instead of allowing them to receive a lump sum of cash.

Other states permit the defendant (the individual, company or corporation that caused the damage) to petition the court to allow them to make future payments as part of an installment plan. When a plaintiff is offered the option to select a lump sum of money, or a structured settlement, the choice should be made only after obtaining the advice of counsel.

Avoiding Taxes

The advantages of a structured settlement annuity include the avoidance of any possible taxes, the ability to provide continuous financial security in the future, along with a way to blend public assistance or other benefits with the annuity.

Significant disadvantages of accepting a structured settlement payment plan include the inability to have access to all of the funds at one time to pay down large medical bills or make discretionary purchases. Anytime the structured settlement agreement generates equal payments, the amount received every month can slowly diminish when factoring in the effects of inflation.

What to Consider

Specific factors should be considered before ever accepting an offer to sell a structured settlement annuity that include:

  • Low Quotes– Due to the competitive nature of settlement buyers and companies that pay cash for annuity payments, the injured party should never consider low quotes or offers well below current market value. While every offer will be based on a percentage of all future remaining payments, extremely low quotes can make selling an annuity unreasonable.
  • Legal Restrictions– Due to some state laws, rules and regulations, there may be significant legal restrictions that make it impossible to convert a structured annuity into cash.
  • Contract Restrictions – Some, but hardly all, annuities and structured settlements are constructed to make it nearly impossible to be sold.

Utilizing Legal Assistance

While it might be nearly impossible for any attorney to help the injured party decide whether or not he or she should sell their settlement, they can offer financial and professional assistance. By understanding the long-term and short-term consequences of the impact it will have on the family, the injured party can make an informed decision.

An attorney can review any detailed proposed contract when selling structured settlements to make sure the new agreement provides adequate protection to the injured party. This will avoid any complications in the future. Because everyone’s circumstances are unique, most states require court approval when receiving cash for annuity payments. With a little due diligence, most individuals can sell an annuity and receive a large sum in exchange.