Annuity Cash-Outs Will Cost You Money

Factoring company (another name for structured settlement companies) purchases often are made at high discounts. Factoring companies are known for enticing injury victims to sell their annuity stream of payments for fast cash at a less than fair value. A structured settlement company or factoring company will give you a lump sum for a low, discounted price. The company makes sure that any amount that is owned to them is paid in advance. Of course, the amount of money that you receive in such an arrangement will be 10 to 15% less than the total amount you would have received over the normal schedule of your payments.

It is important to consider the best interests of any dependents that may be relying on the income and affected by the overall outcome of a settlement. However, there seems to be an emerging trend by some structured settlement companies to apply a high level of pressure to their clients until they accept an offer that may not be fair or in their best interest. This is called low balling on the initial quote, and can be countered by price match any higher quotes you receive. This has become so commonplace, as a matter of fact, that some states have passed laws that require anyone selling their structured court settlement to be represented by a private financial counselor through the entire transaction.