How to Cash Out a Structured Settlement

A structured settlement is a type of annuity which is granted to the winner or settling party of a lawsuit. It is an amount of money paid to affected persons as a means to right a wrong. These types of annuity payments are a lifesaver for people that have lost their job due to an accident or for those who need ongoing medical treatment. Structured settlements are made up of regular payments spread out over a short or long period of time.

When life comes knocking

Even if a monthly or yearly payment is guaranteed
for years to come, life is unexpected and tends to come knocking at the most
inconvenient times. Something as simple as a busted car engine can put any
family in a state of emergency. Needing to pull together $2000 or more in a
matter of days isn’t easy for anyone. For those families or individuals
receiving payments from a structured settlement, they have the option of
cashing out part of it to get back on track.

There are other reasons that can cause the
need for cashing out a structured settlement. For example:

  • Emergency medical costs
  • Impending debt
  • A new business venture
  • Last minute emergency travel
  • Etc.


For those interested in cashing out their structured settlement, the process is not too complicated but there are some important aspects that should be considered.

Consider all the options

Even though cashing out a structured settlement is relatively straightforward, it’s always best to consider all other options first. The reasoning behind this is that a structured settlement can help out later on in life because the payments gather interest as time goes by. Another reason is that when you cash out before the payments are supposed to arrive in your bank account, you will receive less money than you were originally offered.

By doing a thorough analysis, balance out the cost of a bank loan and the interest with how much you will lose by cashing out part of your settlement. If you can pay back a bank loan with future settlement payments and maintain a low-interest rate, then that might be your best option.

Of course, for some, this option might not be the best one and they will need to go ahead and cash out part of all of their structured settlement.

Going ahead with cashing out of a structured settlement


Your structured settlement cannot be changed from the way it was set out in the agreement papers you signed. Therefore asking the insurance company in charge of it to give you some of the money is not how it needs to be done. The only way to cash out, or get a cash advance of a structured settlement is through a secondary buyer.

structured settlement


A secondary buyer is a company that will buy some or all of your future payments. The only way that the insurance company will agree to go through with this is through a court ruling and a judge’s assessment of the situation.


These are the steps you need to take for cashing out with the help of a secondary buyer.

Find a secondary buyer

Look for prospective companies to buy enough of your payments to cover what you need to pay. There are companies like
Annuity.org which offer help in finding these types of buyers. Get a quote from
two or three different companies before making a decision. Always get a
professional opinion, from a financial advisor, for example, to look through
all the quotes for your best option.

Go to court

Once you’ve closed an agreement with a buyer,
get a cash advance and wait for the court date. That day the judge will rule
for or against the sale of your payments. Send a copy of the documents to the
insurance company in charge of your settlement and expect your money. The
entire process could take up to 90 days.

Get everything on paper

In the same manner in which the original
settlement went through lots of paperwork, so will this new procedure. Make
sure every quote, conversation, and transaction are on paper. Have your
financial advisor double check everything. Keep copies of everything for any
eventuality.

Are you looking to cash out a
structured settlement?

There are plenty of companies online that can
help with this process. Make sure to pick the one that suits you best and will
give the better service. Don’t settle for a financial advisor or secondary
buyer that makes you doubtful at any time. This is your money and you want to
get the best solution for you and your family.