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If you are receiving annuity payments as part of a structured settlement, you may have the option to sell your settlement in exchange for a lump sum of cash. If you choose to get cash for a settlement, you will receive all your money at one time, instead of waiting for years for it to be paid out. There are many advantages to having control of your own money, since it gives you the choice to spend and invest it in your best interests.

What is a structured settlement?
A structured settlement is a financial arrangement when the money due to you from a lawsuit claim, or winning the lottery, is paid out in yearly installments. The idea of structured settlements took shape from the the mid- 1950s and 1960s onwards and became an increasingly popular way of disbursing large payouts.

At first, a structured settlement might sound like a perfect arrangement: a yearly payment in amounts of around $100,000, paid out over a period of 25 to 30 years. You have nothing more to worry about, ever, right? But on closer inspection, you begin to see the drawbacks. If you need extra cash because you are planning to buy a house, pay for college, eliminate debt or even take a round the world cruise, you will need more money than the annuity gives you.

Control your money by getting cash for a settlement
Annuities pay out your money over a period of nearly three decades. But your immediate cash needs might mean that you would prefer to have the money in hand, all at once, rather than wait that long. You may want to fulfill your dream of starting your own business, or investing your money. In that case, one of your best options is to get cash for your settlement, in order to control your own money. By selling your annuities, you will be able to access a large amount of cash now, rather than waiting for five, 10, 20 years or even longer.

Selling versus surrendering your annuity
With an annuity, if you need to draw upon the money for urgent expenses, you will have to pay surrender charges, which could be as high as 7 to 15% of the amount withdrawn. These charges are listed in your annuity contract, and cannot be waived even for a medical emergency. On the other hand, if you have already decided to get cash for a settlement, you will have a large sum of money to draw upon for emergencies as well as other expenses.

If you choose to sell your annuity and get cash for a settlement, it’s a good idea to look around and choose a reliable financial company that will give you the best possible rates.

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