Pros And Cons Of Selling Your Structured Settlement Future Payment

by Teddy Lc. - Date: 2007-03-28 - Word Count: 497 Share This!

While structured settlements are always meant for securing you're a stable income in long term, you do not need to limit yourself with the periodic payment. You can, instead of getting a periodic payment, sell your entire or part of your future structured settlement payments. In exchange of the future periodic annuity, you will get a big lump sum of instant cash when your settlement is sold.

There are both pros and cons in selling structured settlement. As the structured settlement buyers are in the business of money making, you should bargain for the best deal and maximize the money you can get from your annuity.

What's good in structured settlement selling?

As mentioned above, structured settlement meant for securing one's income in long term. In most cases, structured settlement recipients are those who lost part of their working ability and could not generate the same amount of income like they used to be. The idea of structured settlement system is to balance back the losses on the income column of their financial balance sheet.

The structured system sounds perfect for those who are too lazy or incapable to make good financial plans, but it is actually a huge waste of opportunity cost. Imagine if you have a big sum of money instead of periodic payment, investing the money wisely in mutual fund, blue chips stocks or real estate might have secure you a much better income than the original plan.

Imagine if you have a good business idea, selling the structured settlement gives you instant money modal. Say the real estate market crush and you see properties are on half-price sales; wouldn't it be better to have the money in lump sum? If you are suffering high interest home mortgage, wouldn't it better to payback the loan and save for the interest?

Long story short, selling structured settlement gives positive impacts to your financial balance sheet as long as you are using the money at the right place.

What are the disadvantages then?

When it comes to bringing more greens into your pocket, Uncle Sam has his eyes (and hands) there. A structured settlement payment is not taxable and it does not affect your social benefits at all. However, if you sell your future settlement payment, every penny you earn with that lump sum of money is taxable. Say you started your business after selling your annuity, the money earn from the business is taxable. So do the money you earn from share dividend, estate investment, or mutual fund.

Wrapping things up

Generally, considering the pros and cons listed above, a selling decision should be made based on the potential impact to your financial balance sheet. If selling your structured settlement tends to generate more income for you, then sell it; else, if you are selling the future payment in your structured settlement for some expensive luxurious (for example, a sport car) that lead to more expenses (the fuel and high maintenance fees), then perhaps you should think twice in using that money.

Related Tags: structured settlement, annuity payment, settlement buyer, settlement seller

In case you you would like to know more about selling and pricing a structured settlement, there are free quoting services available online. Readers are recommended to take advantage on the free services and max out what they can get from their annuity payment. To learn more, click here to visit

Structured settlement guide by Teddy.

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