Settlements from legal disputes are often the most widely used form for securing a structured settlement loan. The structured settlement payments are awarded successfully to individuals with the payment structure designed for total payment over a series of years or months. These payments are structured to allow proper distribution of the funds making it easier to manage a large sum of money. Giving a direct lump sum payment of an initial settlement may be too much money for one person to handle correctly at once. Therefore, the payments are setup on an annuity schedule. The most popular reasons to acquire a structured settlement loan is for accidental injury, medical malpractice, and child support judgments that are to be distributed as a cash settlement in exchange for the structured settlement loan.
These cash for annuity payments are common when consumers need to free up the money that exists in the long-term annuity payments. Sudden accidents or financial needs can happen quickly and the need to pay for these financial set backs are common. It is a popular practice to sell annuities to financial firms that can provide a cash payout to a consumer in exchange for the term of the annuity. Certain tax laws are in effect to protect both financial institutions and consumers during the transfer and payout of the total sum. Getting cash for annuity payments is a major benefit of a structured settlement loan.
A settlement that arises from a court case, lottery winnings, or wrongful death suit can be used to receive a structured settlement loan. These loan payouts are taken as collateral on the total payout of the remaining annuity payments. This type of loan provides quick cash to individuals with the finance company making an upfront investment to gain long-term financial returns on the acquired annuity.