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Cash for Annuity Payments – Scam or Liquidity?

If you have a structured settlement payment plan set up and decide that you want to cash it out for some extra cash, there are options out there. Specifically, the benefit of periodic payments is the guarantee of an ongoing income, which allows the individual to spend the money wisely and avoid splashing out on unnecessary purchases. While it’s tempting to make a quick decision so that the cash can start rolling in, it is vital that one considers whether cashing in on the annuity is in your best interest or whether it is a scam. Some helpful areas to ponder prior to making a decision include:

  • Considering the Losses
  • Searching Around
  • Taking Your Time
  • Selling No More Than What You Need

Obtaining cash for structured settlement payments can definitely be a tempting option for many who want to get their hands on the money quickly. However, it is not always the best option. Before making this decision, a few key points should be taken in to consideration.

Realize What Will Be Lost

The first step in the process is for one to figure out the loss that will be made after taking cash for the structured settlement. Structured settlements are generally tax-free, but upon taking a lump sum one is required to pay state and federal taxes that has the potential to significantly reduce the amount that one would receive as part of the structured settlement. Moreover, when selling a settlement, the buyer is looking to make money off of the sale so it’s important to know that you will not be making as much money. Cashing out may equal quick money, but it will be far less than its real value.

Do Some Thorough Searching

The biggest mistake that many people make when looking to sell a structured settlement is that they settle with the first buyer or company that one comes across without shopping around. It is important that one does thorough research before selecting the buyer. When it comes to ones assets, you should certainly not entrust them to everyone. Since it is your money, you should really take your time to find an established and reputable company. There are so many resources that exist when doing your research – from the Better Business Bureau to the Attorney General’s Office. The main thing to remember is that one should never rush into a sale without doing the proper research.

Sell No More Than Needed

In many cases, structured settlements encompass a rather large amount of money, so that after one handles all of their financial necessities, one may still have to deal with a big sum of money along with the strong temptation to spend it right away. This is definitely a great responsibility, as money should be used and invested wisely. Otherwise, you may quickly end up with no money left.

Therefore, it is important that one analyzes thoroughly one’s financial state. If you decide that you only need a small amount of money to satisfy your immediate cash needs, then opting for a partial cash payout option is an obvious choice. In this way, one will have both advantages: obtaining cash now and still keep receiving a steady monthly income in the future.

Final Thoughts

To sum up, keep in mind that selling your structured settlement for a lump sum of cash is not the decision to be made in a hurry. Take your time to explore thoroughly the modern asset-backed market, check leading funding companies, compare their terms and services and, of course, consider over your current financial case to determine your exact cash needs. While selling for cash will ultimately cause some overall losses, it is certainly not a scam as long as dealing with the right buyer. Once the transaction is complete, you’ll be on your way to some cold hard cash!