Pros and Cons of Selling a Structured Settlement

If you’re thinking to yourself, “I want to sell my structured settlement payment,” there are many different factors you need to consider. First, how much money will you actually receive from the sale? Second, will the payout be enough to cover your expenses or will you still be left with unpaid debts and no way to pay them? If you are considering selling my structured settlement payments for a single lump sum of cash, consider both the pros and cons before you do.

Pros of Selling a Settlement

If the payments for your settlement simply aren’t enough for you to get on top of your bills, selling your settlement for a single lump sum of cash may be the right option. Below you will find a list of some of the other benefits associated with selling a settlement for cash:

  1. You will receive one large sum in a matter of weeks rather than spreading the payments out over a matter of years. If you are in need of a large influx of cash, selling your settlement could help you out.
  2. You can use the money to pay off debts, especially those with high interest rates, which could save you a lot of money in the long run. If you have a mortgage or a car loan, selling your settlement could enable you to settle those debts.
  3. You have the option to invest the lump sum of money to receive a higher interest rate – you can use this for your retirement, to invest in a business, or for another purpose. If you invest the money in an IRA, for example, you could receive a conservative return of 5 percent per year, or more.

Each settlement is different, so the situation you may find yourself in with a sale could be different from the situation someone else is in. This is why it is important to do your research before you sell.

Cons for Selling Structured Settlements

Though there are several benefits associated with selling a structured settlement, there are still some cons to consider. Below you will find a list of several cons associated with selling a settlement for cash:

  1. You will be forfeiting your regular periodic payments in favor of a single lump sum – once you sell your settlement, you will no longer receive any payments.
  2. You won’t receive the full value of your settlement; you will be selling it at a discounted rate that could be as high as 18 percent or 20 percent.
  3. You might be tempted to make unwise purchasing decisions or investments if you have a large sum of money to work with instead of periodic payments. This is one of the main reasons insurance companies use settlements as an alternative to large payouts.

Selling your structured settlement for cash might be a good option if you have one or more large debts that you would like to settle to avoid interest. Before you sell, however, take the time to shop around for the best discount rate and choose a reputable company to make sure that the sale is done correctly and that it is as hassle-free for you as possible.