How to Get the Best Structured Settlement Deal

When one wins a civil lawsuit, the damage settlement often comes in the form of periodic cash inflow called a structured settlement.  You can also get one from a lottery win or an insurance payout.  These payments are almost always secured or guaranteed cash flows.  But some people prefer to get a lump sum cash payout and would sell the structured settlement for a discounted cash value today.   Just like securing a mortgage, selling a structured settlement is a financial transaction best left to professionals in the business.  Unless you have the skill yourself, it can be a good idea to tap into the right people to get the best structured settlement deal.  But not all have your interest in mind.  It is best to consider the following.

Step 1:  Ask your lawyer and colleagues for their input if they had dealt with structured settlement companies before and get some recommendation.  It is important to establish their legitimacy and reputation before signing on the dotted line.

Step 2:  Shop around and the best place is the internet.  Be sure that the structured settlement company has a local address and contact you can verify by calling and is registered with the Better Business Bureau.  This is often indicated by a triple B logo on its site.  In addition, companies with at least 5 years in the business often tell you they have established a reputation they need to protect.

structured settlement deal

Photo source: http://www.flickr.com/photos/mrbill/3355278756/

Step 3:  Get quotes from these companies and shortlist only those that can provide the best price without the need to haggle with them. There is no obligation to accept a quote.  As a pricing guide, depending on future payment streams, typical discount rates for a structured settlement transaction to convert future cash streams into a lump sum today are usually between 8% and 15%.  Most companies have a structured settlement calculator that helps you determine the equivalent cash value of future cash inflows in your structured settlement.

Step 4:  Look for online settlement quoting companies that have a network of funders or financiers who can competitively bid for the value of your structured settlement. Bear in mind that these funders earn money by re-investing your structured settlement at the highest yields while giving the lowest possible cash value for your expected cash inflows.  It shouldn’t be difficult to spot the highest bid.

You should never accept an offer if you’re not sure.  But if the Disclosure Statement or Assignment Agreement contains a Cooling Off period, you can still change your mind and cancel the transaction in case a better one crops up.

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