Why Do Companies Purchase Structured Settlements

There are many companies that purchase structured settlements and not many people understand on what modes operand or business concept these structured settlement buyers function. If you are selling structured settlements, there may be several factors determining your choice but unless you are aware of the reason why companies purchase structured settlements, you would always have an iota of uncertainty or doubt. In any case, there are many promoters and critics of structured settlements buyers. Some endorse the idea while some ring the bells of caution expressing their views against selling structured settlements.

Why companies purchase structured settlements is fairly easy to understand. You would be selling structured settlements if you have any annuity or if you claim for personal injury or medical expenses have been met with by a company or a financial institution. Often these payments are not made upfront. A structured or scheduled payment is planned and you would receive the entire amount in parts over a certain period of time. You may be getting a hundred thousand dollars over ten years’ time, receiving ten thousand dollars every year. In many cases, there are no instant payouts and the payments only start coming in after a certain period of time. For instance, in a case where a child is due to get paid and the claim has been settled with the clause that the payments would start when the child turns eighteen or twenty one. In such cases, you do not get the entire amount at once and you may have to wait for a certain period of time before any payment is offered to you.

Companies that purchase structured settlements offer you an instant payout. You can decide on selling structured settlements partially or wholly. In both the situations, you do not get a lump sum amount from structured settlement buyers that equals the entire amount that is due to be paid to you. If you are supposed to get a hundred thousand dollars over ten years or twenty years and you choose to get companies that purchase structured settlement, they would not pay the entire amount. A small percent of the entire amount will be cutoff and you would be paid the rest. How much is cutoff will depend on the particular estimates from the companies that purchase structured settlements. This difference that the structured settlement buyers manage to make is invested by them and they make money out of their investments.

Why structured settlement buyers purchase structured settlements is really not that complicated when you understand that raising the potential of a few hundred thousand dollars from a few clients selling structured settlements can make a huge difference in their investment capacity.