Many investment firms now offer you the ability to turn your structured settlement payments into a lump sum payment by selling your rights to collect future payments. If you are trying to decide whether or not a settlement buyout is right for you, taking the time to consider the factors outlined below can help you to make this important decision:
Inflation
Many people worry about selling their structured settlement payments due to the fact that these payments are not bought at face value, but rather purchased for a percentage of their total value. However, the fact is, you may not be losing quite as much money as you think you are buy choosing to let an investment firm buyout your future payments.
This is because when calculating just how much money you will really get in the way of future payments, you must consider the impact that inflation will have on these payments.
Unfortunately, structured settlements do not take into account the impact that inflation can have on a dollar. Consequently, while the cost of living may rise dramatically over the course of the next 10 years or more, the size of your monthly payments will remain the same. So while you may be able to pay your entire rent with your monthly payment right now, you may find that this same payment only covers half the rent in the future.
By choosing to sell your payments for a lump sum, you will have the ability to make the most of your money at its current value rather than waiting for inflation to deflate its value.
Partial Payments
People often believe that its all or nothing when it comes to selling structured settlements. However, this is not the case. While you can choose to sell off all of your future payments, you can also choose to sell only a portion of these payments.
By choosing to sell a portion of your future payments, you will be able to take advantage of all the benefits that come along with receiving a lump sum of cash. For instance, you can use this money to purchase a home, buy a car, or make an interest bearing investment.
However, you will also be able to enjoy the benefits of knowing that you have some income coming in each month even if you were to lose your job or other income sources. For many people, this option proves to offer the best of both worlds. For help understanding structured settlement buyouts, contact a professional.
Share14 May 2015
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