A structured settlement isa financial instrument under which an individual receives monthly or annual
cash payments in compensation for a personal injury or, to fulfill a statutory
payment obligation. Structured settlements are used as a vehicle to provide
long-term cash compensation for victim. It is a financial arrangement that is
used as an alternative to single, large lump sum cash payouts. Courts often
award structured settlements in civil suits as a way to reduce the immediate
financial impact on the insurance company that will be making the payments
while also ensuring long-term protection for victims.
A structured settlement factoring transaction allows individuals to legally transfer or sell structured settlement to a third-party in exchange for a single lump sum payout. It is an option that is especially useful for individuals who need immediate access to cash to deal with an unexpected financial crisis or other personal emergency. Many states currently have statues in place that govern the sale of structured settlements to third parties. In addition, a federal law passed in 2002 also ensures a certain level of protection to individuals seeking to assign their structured settlement to a third-party.
One of the biggest challenges that individuals face when trying to cash out
their structured settlement is to find an entity willing to purchase it from
them at a fair and equitable price. A structured settlement factoring marketplace
offers such individuals a way to reduce much of the legwork and research that
is required for such transactions. A structured settlement factoring
marketplace is basically an online venue where individuals can list their
annuity for sale and have multiple buyers bid on it. Such marketplaces operate
in almost the same manner as an online auction site does. An individual simply
lists their annuity for sale and then reviews offers from potential buyers and
chooses the bid that makes the most financial sense for them.
There are multiple advantages to using such a market place to sell structured
settlements. Annuitants for instance, are able to receive and review quotes
from far more companies than they would have been able to otherwise. The
increased competition among buyers also often means that the seller gets a
higher price than they would have been able to get if they had pitched it
themselves to individual companies. An online factoring marketplace also is
more convenient for buyers because they can access all available annuities for
sale from one portal. Typically, online marketplaces offer calculators to help
sellers get a realistic estimate of the value of their annuities and to figure
out what a fair price for it would be. Importantly, all transactions that take
place on factoring marketplaces are governed by all applicable state and
federal statutes, so both sellers and buyers are well protected.