Just how structured settlement buyout offers work

Know 'discount rate' before trading payment stream for a lump amount

Evaluating structured settlements"It's my money and I need it now! inches



That cable-TV declaration, which includes spawned the creation of dozens of YouTube caricature, invites owners of financial instruments called "structured settlements" to cash in their guaranteed streams of future income for upfront large sums.

But cash "now! " means settling for fewer dollars today than the total stream of payments would soon add up to. The moment is that trade the right decision?

What organized settlements are
Structured pay outs are a stream of payments that a consumer can win after an accident, personnel compensation state or legal judgment. Anyone who has to pay out an organized settlement will buy an annuity agreement from an insurance company. Settlement payments are certain over the life of the contract. They're certain, predictable.

But circumstances can transform. Perhaps you want to buy a house, start up a business, get married -- whatever life serves back up that makes your storage compartments feel empty.

Sell your settlement? Yes
Ken Murray, CEO of J. G. Wentworth, the firm in back of many of those TV SET commercials, argues that advertising structured settlement payments can be an improved alternative to taking out that loan, because it doesn't require any credit checks and if you're not playing debt. "Selling structured settlement payments is the safest financial purchase a consumer can enter in into, " he says.

Murray points out that most states have laws and regulations that govern what type of settlement can be sold, and they require a judge to look over the deal to review its fairness.

Nevertheless he cautions that it can "not a good idea if the consumer will not have a legit need" for a large sum, or if the payments are essential for living expenses.