Structured Settlements: The Pros, The Cons, and Why You Might Sell

selling a structured settlement

If you’re thinking about selling your annuity settlement or selling a structured settlement, there are plenty of reasons why it might be a great choice for you.

Maybe you’re interested in going back to school — the average private university charges $31,231 annually for tuition these days, and even the average state school charges $9,139 for annual tuition.

Maybe you’re hoping to buy a new house — which costs $272,900 on average. Perhaps a new vehicle? That’s typically around $33,993.

Maybe you just really want to pay off some debt, because if you’re like most American consumers, you’re paying about $950 each year just to cover interest on loans.

Regardless of why you’re thinking about selling a structured settlement, it’s important to realize that there are plenty of good options available to help you through the process. It’s also important to realize that some people may benefit more than others from selling a structured settlement, so the best way to figure out if it’s a good choice for you is to look at both sides of a settlement and see whether the cons outweigh the pros:


  • If you end up with a settlement because of a lawsuit, you may have the ability to choose how long your payments will last and how much you’d like each payment to be.
  • You often have the option of receiving your payments immediately or deferring payments for a certain period of time.
  • The payments come on a regular basis, making them a bit like annual paychecks and making it easier to plan your budget.
  • Structured settlement payments don’t depend on the strength of economy, unlike stocks and real estate investments.


  • Many people end up in structured settlement because they don’t have any real choice in the matter. When it comes to lottery payments and lawsuits, your only options are to receive everything upfront or to receive smaller payments over a long time.
  • Taxes! Although you don’t have to pay taxes on the money sitting in your settlement fund, your payments are considered income and you’ll have to pay taxes on them.
  • Once the terms of your settlement are finalized, it’s nearly impossible to go back and change them.
  • All the money in the settlement fund is yours, but you can’t access it! Even in an emergency, you’ll face high early withdrawal fees.

So now it’s time for you to decide — is selling your structured settlement the best choice for you?

Mitigating Medical Debt: How Selling a Structured Settlement Can Help

selling a structured settlement

Did you know that American consumers owe a total of $11.91 trillion in debt, and that a large portion of it is medical debt? In 2014, 64 million people — about 35% of the U.S. population — said that they struggled to pay bills, or were stuck paying off medical debt. What’s more, nearly 20% of credit reports — one in five — are hurt because medical bills are overdue.

If you’re struggling to pay off medical debt, there is a simple answer: sell your structured settlements. Here’s why it works.

The Interest Is Only Going to Accrue
The longer you take to pay off debt, the more interest you’re going to accrue. In other words, it’s not enough to pay the minimum amount of debt. Chipping away bit by bit might eventually work, and is better than doing nothing, but the fact of the matter is that interest is swelling your debt. You need to make robust payments on it. The cash you get from selling a structured settlement can quickly and effectively take care of it, so you don’t wind up spending so much on interest down the road.

Selling a Structured Settlement Is Relatively Quick
Selling a structured settlement is a bit of a process. First you need to work out a deal with the purchasing company. Then you need to get a judge’s approval to sell the annuity settlement. And then — finally — you can get your money and pay off the debt. While this sounds like quite the process, it can be taken care of rather quickly, and in far, far less time than it’d take to pay off the medical debt on its own.

It Sets You on the Path to Financial Freedom
When you no longer have to spend hundreds of dollars each month paying off medical debt, you can use that money to invest in other places. You can make larger payments on other pieces of debt, or tuck it away in a savings account, where it can grow. Basically, getting rid of your medical debt will set you on a path for success.

If you have copious amounts of medical debt, you need to consider selling a structured settlement to pay it off. If you don’t, you may find yourself continuing to struggle against interest, when you could be enjoying financial freedom.

If you have any questions, feel free to share in the comments.

Selling Structured Settlements or Annuities to Pay For Education-Related Expenses

education related expensesAn education is one of the most valuable things a person can invest in. That’s true literally and figuratively. The doors open to you with the right education can offer otherwise unobtainable opportunities. On top of that, it’s literally one of the most expensive things you can purchase — right behind a house, and on par with a car in most cases.

In fact, the average four-year student graduated with more than $35,000 of student-loan debt in 2015. In total, approximately 71% of people who will graduate with a bachelor’s degree will have some amount of student-loan debt upon graduating. That number is up from 64% in 2005; 20 years ago, it was less than 50%.

Investments, including education, take time to mature and provide dividends. Still, the faster you can pay off that debt, the less you’ll end up paying in the end. One of the best ways to pay for an education is by selling an annuity or structured settlement. Whether it’s the result of an insurance claim or lottery winnings, about 37,000 Americans receive some form of this compensation every year. Many of them decide to take this slow, conservative asset and sell it for cash they can use now. Of those who do so, 92% say they are happy with their decision.

Even the classic cost-effective strategy of attending community college is becoming more burdensome. The average cost of one year’s tuition at a community college was $3,347 in 2014. The Department of Education reports that only about one-third of community college students finish their education, in large part because of the cost.

Selling an annuity or structured settlement might seem like a risky idea, but it’s really a sound decision for those who are burdened with debt — or those who want to avoid it in the first place. In total, there is approximately $68 billion worth of student-loan debt for graduates with a bachelor’s degree in 2015. If you’re one of these recent graduates, or have been in the workforce for some time already trying to pay back loans, take the money you get from selling your settlement and do what you did when you chose to get a higher education: Invest in yourself.

Plan Before Selling an Annuity Settlement: 3 Tips

selling an annuity settlementAnnuities are one of the most prevalent ways society uses to pay back, or pay for damages done to someone. It’s a way to provide the damaged party with restitution over a long period of time and thus doesn’t require the paying party to have to come up with a large sum of money right away. As of 2013 there were approximately 34.8 million individual deferred annuity contracts alone totaling a value over $2.58 trillion. Some people prefer to receive their money immediately, though, for a variety of reasons. Medical bills, home mortgages, or even that they believe they can yield a better return by investing the money themselves are just a couple examples. For whatever reason, selling an annuity settlement has become very common today. Here are three things you should do when deciding for yourself.

1.) Make a List: There’s nothing wrong with writing up an old school, pros and cons list. Before you decide if selling an annuity settlement is right for you, it’s good to lay out what both options will entail. You’re making a decision that will affect the rest of your life, make sure it’s the right one.

2.) Research: Contrary to what some people believe, there are some shady characters out there that would love to give you a small amount of cash for your structured settlement payments. Hiring a lawyer or financial adviser of some kind to assist you in finding the right buyer is a great way to avoid getting burned. They can help make sure you find a reputable company to do business with.

3.) Budget: If you decide on selling an annuity settlement the first thing you’ll want to do is plan out how you’ll be spending and investing the money. Selling your annuity means you’ll quickly come into a substantial amount of cash. Don’t let the dollar signs trick you into thinking it will last forever. According to The Rutter Group, statistics show that 25%-30% of accident victims spend all the money they get from settlements within two months of recovery. Within five years that number increases to 90%. Chances are they could be one of the 64 million Americans that reported having trouble paying bills or had accumulated medical debt in 2014. Paying off bills and debt is a great way to spend your annuity cash, but don’t blow it all. Unless you absolutely can’t, you’ll want to make sure you invest a good portion for your future.