Did you know that the average structured settlement payout is $324,000? If you?ve recently received a settlement, you may have a lot of questions about how this entire process works. There are a lot of details, and people are going to give you some conflicting information on how you should do things.
Here are a few common questions, along with their answers.
What?s the difference between lump sum and annuity?
If you win something like the lottery, you?ll be asked to take your winnings in either a lump sum or an annuity. A lump sum is all your money at once. Typically, you?ll receive less of it than if you opt for an annuity, in which case your winnings are paid out to you in yearly installments. Though annuities may gain you ?more? money overall, you have to wait to receive it (and it will become less valuable over time thanks to inflation).
Can I sell my annuity for a lump sum?
A large number of people who have an annuity are in debt, whether it?s because of the high cost of education, medical bills, or something else entirely. These individuals would rather not wait years and years for their money while they are racking up interest on their debts in the meantime. In cases like these, yes, it is possible to get cash for structured payments. In most cases the company you sell the annuity to will take about 10% of the total worth. The benefit here, of course, is that you can do whatever you want with your money — you can even invest it and likely make back anything you lost, and then some.
What?s the best pre settlement loan company?
There?s no right answer to which company you should trust with your annuity — or who will give you the best rates. The wise thing to do is shop around. Compare rates from a variety of companies and also look up reviews of their business practices. If they don?t know the answers to common questions, like what the difference between lump sum and annuity is, then they might be running a scam and you?re better off moving to the next potential company.
There are a number of reasons people are interested in selling off their annuities; you might be one of them. Keep these tips in mind so that you know what you can do with your money.