Over 37,000 Americans use money from structured settlements and annuities every year. Sometimes, though, the payments aren’t enough. Life happens, and when it does, it can be expensive. Luckily, selling a structured settlement is an effective way to get that money, but that doesn’t necessarily mean it’s the perfect way. Like all things, there are pros and cons to selling an annuity settlement. Here’s what you should know.
Obviously, there are upsides to selling a structured settlement or annuity. The first and foremost of which is that it’s a fast way to get money if you need it, the keyword being need. In order to sell your annuity, you first have to get a judge’s approval. So long as you’re going to use the money to better your and your family’s life — such as paying for college, fixing the house, investing in a business, paying for medical bills — the judge will allow it. Now, secondly, selling a structured settlement is a good idea, because if you don’t, you may have to take out a loan, and wind up more in debt than you’d like to be.
There are some downsides, though. First of all, you’re not going to get the exact amount you have left in one big lump sum. They’re going to take a chunk out. Selling off a structured settlement or an annuity can cost surrender charges that go as high as 10%. Secondly, you’re saying goodbye to that supplemental income, which can make your financial future a bit more challenging.
Good idea, bad idea — it all depends on your situation, but there is one, last thing you should know. About 92% of claimants who have sold their structured settlement were satisfied with their decision. Does this mean you should sell? Not necessarily, but don’t be afraid to do it if you need the money.
If you have any questions about selling a structured settlement or an annuity, feel free to share in the comments.