Best Structured Settlement Companies

What is the purchase price?

Before you sell your structured settlement, get quotes from several companies to see how much you can reasonably expect. Then, as you consider the quotes, keep in mind that the purchase price or lump sum they offer might vary considerably due to the time-value of money involved in the quote. “Time-value” refers to the idea that money available now is worth more than money available later, because if you have it now, you can invest it and earn more off of it. Companies consider several factors when determining the purchase price of a settlement.

• Duration of the settlement: A dollar now is worth more than a dollar in the future. How soon the total settlement will be paid out in full makes a difference in the purchase price. Buyers mostly prefer payments that will be made sooner to lessen their risk, and will often pay less for a settlement that will not pay out completely for many years.
• Timing of the payments: The sooner the payments being sold will be received by the purchasing company, the higher the purchase price will be. For instance, payments that come monthly may be more attractive than payments that come annually or bi-annually. If your payments are spaced out widely, you might consider selling some but not all of the payments at once.
• Total amount of the settlement: Obviously, the total value of the settlement affects the price you can sell it for today. Structured settlements of lower value may not be easy to sell for a lump sum.

Are there surrender charges or fees?

Depending on the initial plan setup, surrender charges and fees must sometimes be paid when selling or transferring a structured settlement. Surrender charges are imposed by the company that owns the structured payments as a way to recoup the money spent in creating the plan in the first place.

• Legal fees: Generally, since a structured settlement is a legally-binding agreement, you will need to appear in court in order to sell your payments to a company. Some companies pay the associated court fees, while others require you to pay any court costs or legal fees yourself.
• Broker fee: A company may charge a fee if it needs to hire a broker, or act as a brokerage itself, in order to secure the funds for the lump sum payment. Often, this fee is worked into the final payment amount.
• Other fees: There can be other fees associated with the sale of a structured settlement including recording, filing, administrative and miscellaneous fees. These fees are usually deducted from the payment amount and do not have to be paid upfront by the consumer.

What is the discount rate?

The discount rate offered for a lump sum payment on a structured settlement is similar to the interest rate that consumers pay on a standard consumer loan. The company buying the settlement wants to do so at a discount in order to turn a profit. For example, if you have a $100,000 structured settlement, a company may offer you a 20 percent discount rate, meaning you will receive 20 percent less than the value of your settlement, or $80,000. The lower the discount rate, the better it is for the consumer, because that means you will receive more money.

• Understand the rate: Consumers who aren't comfortable with financial formulas should consult a professional or friend who does. Quotes and the explanation for rates can be confusing and a good account executive at any company will take the time to help the consumer understand the full transaction. You also need to stay aware of the standard discount rate in your region at a given time, so you'll know if quotes are reasonable or if the company is taking advantage of you.
• Negotiate the rate: The quoted discount rate is not set in stone. When reviewing quotes, consumers should feel comfortable negotiating a better rate with each company. While there are standard rates at any given time, the purchaser will likely push to get the highest discount while you should strive for the lowest
• Shop around: The discount rate is one of the features of a structured settlement purchase that will vary widely from company to company and state to state. Be sure to shop around for the lowest discount rate in order to keep as much of your money as possible.

Does the company have good customer service?

When considering a company to purchase future payments, you should be sure the company provides access to customer service. The process can be difficult for those with little financial, tax or legal knowledge, but access to customer service can help reduce fear and stress related to the transaction.

• Customer service hours: Keep in mind that customer service hours vary based on time zones. For example, if you live on the West Coast and the company buying the payments has East Coast hours, you may find yourself frustrated at 2:00 p.m. when you can't get ahold of anyone.
• Online chat: Being able to get help instantly without having to wait on hold can be an advantage as you try to understand and keep track of a transaction. Online chat gives consumers an opportunity to get answers immediately.
• Dedicated representative: Some companies provide a dedicated service professional for their clients for the duration of the transaction. This can help to avoid repeated explanations of the situation to multiple members of the staff and may reduce the stress of a complicated financial transaction.

What is the company's reputation?

In order to avoid scams, do your homework and research companies who offer to purchase structured settlement payments. Researching a company's reputation is not difficult and is an important step towards a successful transaction.

• Number of denials: A judge can deny the contract for the purchase of a structured settlement if they feel that the settlement is not in the best interest of the consumer, or if they feel that the purchasing company is trying to take advantage of the consumer. Companies who offer the most professional service should have a low denial rate.
• Dollars purchased: The amount of structured payments purchased by a company can be a good indicator of their health and stability. Generally, the higher the total dollars purchased by a given company, the longer they have been in business and the more transactions they have completed successfully.
• No history of bankruptcy: Avoid any structured settlement company with a history of declaring bankruptcy. These companies may not be financially sound and may put you at risk. You can find out about a company's legal history by requesting court documents in the state in which they are registered. Many states offer a free searchable index of court documents on the Internet.
• Customer reviews: Unbiased customer reviews can warn of potential problems. Reviews not located on the company's website are a good source.

Broker

A structured settlement broker, also known as an annuity broker, is a professional with specific training in structured payments. Brokers can aid in the whole process of obtaining an advance or full payout against the settlement.

Direct-funded

Direct-funded companies have their own sources of capital and are therefore free to make decisions on the purchase of settlement payments. Other companies must use a third party to guarantee funding which can lead to delays.

Consumers with structured settlements

Anyone can be awarded a structured settlement in a lawsuit, though the term most often refers to those who have been awarded a settlement after a personal injury legal case. They are often paid monthly or annually in installments. Consumers who want to get their structured settlements paid out as a lump sum should work with a structured settlement company.

Those who have annuities

An annuity generally refers to structured payments made for reasons besides a lawsuit, such as inheritances, survivor benefits and some retirement plans. A structured settlement company can help you get your annuity paid out as a lump sum.

People with lottery or contest winnings

Jackpot winnings are often set up as structured payments for tax purposes. Sometimes winners can choose between a lump sum payment or a structured settlement payment plan.