It’s a wonderful year for you. Things are going great and the job market is looking up. Everyday you leave your home in Pittsburgh, Pennsylvania and go to work at a factory. Than one day at the steel mill the unthinkable becomes thinkable and you get badly injured on the job.
You are unable to go back to work at the factory and your children are complaining that they are hungry and you need to put more food on the table and buy better Christmas gifts so that you can keep up with the “Joneses”. Well what happens next?
You end up getting a good lawyer and you head into the court of law. The old steel mill factory has insurance for these types of accidents and they offer to pay you out monthly what you were making after taxes are taken out.
You agree to the settlement but realize that you are behind on your bills as it is and need a way to get back up to par. The next phase of the annuity selling process works like this. You are offered a large lump sum for your structured settlement from a structured funding company who is interested in giving yout the cash that you need now.
Since it’s your money you have all rights to cash out your annuity whenever you so desire. This is why there are funding companies who take into account the time value of money as well as the purchasing power and expected inflation rates when offering to purchase your old annuity outright. Another big factor is how easily they can resell the investment and the total costs incurred in processing the sale of a settlement that you are looking to sell off for a large payment.
In the end you will often find a payment that pays you $87,000 a year is going to pay you anywhere from $15,000 to $45,000 depending on when the settlement is due. If the $87,000 is due in the next year than you can likely discount 10-15 percent off of the total price and that is a feasible offer that you may receive for your investment.
This is one of many common examples that are common every single day in the industry.
The best tips for selling your annuity is to shop it around. Get multiple quotes, and do your proper diligence.