Regardless of how carefully you plan for your financial future, some things cannot be foreseen. If you are currently receiving payments from a structured settlement or annuity but have found yourself in a financially needy situation, you may think that you have no options. This could not be further from the truth. In this article we will take a look at the emergency financial option of selling your structured settlement or annuity and how you go about doing so.

Pros and Cons of Opting for Quick Cash

Obviously, there is going to be some give and take when selling your annuity or structured settlement. You want fast cash, so in order for a company to be willing to purchase your annuity or settlement payments you are going to be taking a financial hit.

Only you can figure out if it is worth the loss you’ll be taking in order to receive a lump sum cash payment. Before opting for cashing out your structured settlement or annuity payments in order to pay your medical bills, credit card payments, or tuition, be sure that this is truly the best option.

Yes, when your phone starts ringing off the hook because creditors are wanting their payments, the stress of the situation can make selling your structured settlement or annuity seem like the only option. But is it? In order to look at your choices in the best light, ask yourself the following questions:

• How much of a loss will I be taking if I sell my structured settlement?
• Are you in a position where the monthly payments will not be missed once they are gone? Remember, when you sell your structured settlement or annuity, you will receive a nice chunk of money to pay off your bills or creditors, but what happens after that? If you have come to rely on the monthly payment as part of your necessary budget you may want to consider other methods of paying for looming bills or creditors.
• Is this the only option you’ve considered? If you are thinking of selling your structured settlement or annuity due to creditors or collection calls, you may have other options. Have you considered consolidating your debt? You may be able to take all of your debt and turn it into one monthly payment instead of paying several bills each month. In fact, if you do consolidate your debt, you may be able to pay the monthly bill with your structured settlement or annuity payment and still have money left over. Doing so is much smarter than selling your structured settlement or annuity and paying off your debt in a lump sum. By consolidating your debt and making monthly payments you’ll save your structured settlement and you’ll be building your credit rating at the same time.

If you are still considering selling your annuity or structured settlement after asking yourself these questions, at least make an appointment with an accountant or a financial planner before making the decision. If you are thinking of selling your structured settlement in order to put a down payment on a home or purchase a car, try to figure out another way to save for the down payment. Once you sell your structured settlement or annuity and spend the money, that’s it. A decision like this should not be taken lightly. Only sell your structured settlement or annuity if there is no other possible option.

How to Sell Your Structured Settlement or Annuity for Cash is a post from: Lump Sum Annuity

If you have been awarded a sum of money for a personal injury claim, malpractice, or liability of any kind, you may be receiving your money in the form of a structured settlement.

If you are receiving structured settlement payments, but have a situation where taking it in the form of a lump sum would be more beneficial, you can do so by selling your structured settlement to a financial institution and receiving a lump sum. Should you consider this option? Deciding to receive your settlement in a lump sum is a huge financial decision. Rationally weighing out the pros and cons when you find yourself in desperate need of finances is sometimes difficult to do. Here are some situations where it may be beneficial to sell your structured settlement and receive a lump sum.

Reasons to Sell Your Structured Settlement

1. Investing in a business. In certain situations, investing in a business can prove to be more lucrative than receiving your structured settlement payments. If you have carefully looked at the pros and cons of your new business venture, owning a business may be a wise decision.
2. Paying off your debts. If you are in a situation where your structured settlement payments aren’t making a dent in your existing debt, taking your money in a lump sum may allow you to pay off your current debt and save you from paying interest in the long run.
3. Education. If you find yourself needing funds to help your child, your spouse, or yourself pay for college or a new career, cashing out your structured settlement can give you the funds you need. If it is for your own education, and you will be able to secure employment with a financially rewarding career, this might be a wise decision.
4. Emergencies. No one likes to think about cashing in their structured settlement to pay for a medical or financial emergency, but these things do happen. Before making the decision to take a lump sum for an emergency situation, first find out if there is any other way to deal with the situation. Emergency cash needed for hospital bills or back taxes can often be worked out in a payment plan, allowing you to save your settlement payments for your retirement.
5. Purchasing real estate. If the time is right to purchase a home and prices are low, it can be a wise investment to cash in your structured settlement for a lump sum amount. Paying cash for your home will give you instant equity and if you are buying low, you will most likely make a nice profit when you decide to sell. Purchasing real estate and using them for rentals can also be a wise investment, especially if your rental payments will end up being more than your structured settlement payments.

Although there is a cost involved with selling your structured settlement payments, there are situations where it is the best choice. Have you recently sold your structured settlement to receive a lump sum? Leave us a comment and let us know how it’s worked out for you.

Top 5 Reasons to Sell Your Structured Settlement is a post from: Lump Sum Annuity

Retirement is a part of every salaried person and much before his retirement he has to decide about his structured income after retirement. It is here that Lump Sum Annuity comes into picture.

This is how this scheme works. During the tenure of service, it is just and natural that every employee saves some money for his future. He has to invest these savings so that after his retirement, he gets some money every month which he can use for his day to day needs. To encourage the employee to save, some companies have instituted what is called as pension scheme. The employee, instead of investing his amount elsewhere can invest the amount with his employer who in turn would pay him Lump Sum Annuity. This Lump Sum Annuity is paid at a pre fixed percentage every month for the rest of the life of the employee. But the employee has to decide whether to invest with his employer or to withdraw the savings for better investment. Once this decision is taken, it is normally irrevocable.

Normally, the company pays him a predetermined percentage as Lump Sum Annuity. But, this Lump Sum Annuity or pension may diminish in terms of its intrinsic value. This is particularly true when there is inflation. Presuming that the inflation rate is 5% annually, in the next 10 years, the real value of Lump Sum Annuity would have substantially reduced. On the other hand, the investment market may be more favorable and investing in the open market could fetch more benefits than the Lump Sum Annuity. For example, investing in Shares could be more beneficial. But it has an element of risk with it. Unless the person is experienced in the operation of the stock market, this investment is not safe and such persons could opt for Lump Sum Annuity. There are also cases where the employee may find it necessary to withdraw the savings to pay his debts or law suits, medical expenses, etc. Therefore before opting for Lump Sum Annuity, the employee has to think carefully, and he should analyze the pros and cons. It is advisable that he should consult a financial planner.

In addition to this, there are many finance agencies and investment companies including banks who offer Lump Sum Annuity Plan at different rate structure. Some of these plans are also growth investment plans with assured Lump Sum Annuity in addition to some health coverage plans, etc. Some investment plans include payment of Lump Sum Annuity to the spouse or any other nominee either at the same rate or at a revised rate. As an alternative, some retired persons may prefer to invest the bulk in developing real estate property. This type of investment has one advantage; the real value of the property increases and at the same time, with proper planning he can get some returns from the investment made on real estate property if it is leased on monthly rent, etc. The return he gets as rent every month may even be equal to the Lump Sum Annuity which he would get from his employer.

On the part of the employer or the financial agency offering this Lump Sum Annuity, the amount is calculated using the estimates made by a qualified actuary. The actuary calculates taking the average life expectancy, growth rate of funds and many other factors into account before deciding on the Lump Sum Annuity which could be offered to the pensioner.

There is another category of people who are not really dependent on the Lump Sum Annuity for their retired life. Such retired persons may choose lump sum investment plan. In this plan, the person encashes his pension with some investment company. The company will pay a sum which is slightly less than the face value of the pension amount and the difference is the profit for the company. These amounts are normally invested in real estate or in franchise business. But, in this case, the pensioner should ensure that the return on the investment will cover the discount recovered by the company.

In all these investments, a wise decision is all that matters. But many people do not have thorough knowledge of the investment mechanism. They may not be aware of the financial market trend, the health of the financial institutions where investment is proposed to be made, etc. It is here that the role of financial advisers or investment advisers comes into play. They advise the investor on the appropriate investment plan so that the pensioner gets his Lump Sum Annuity or other appropriate investment plan. But it is the financial or investment adviser who can give the right type of advice depending on the need of the investor, his financial propriety, etc.

Lump Sum Annuity is a post from: Lump Sum Annuity