Structured settlements, which are common in personal injury cases, are designed to provide long-term financial support to the recipient. Structured settlements offer an injured person payments over time providing the comfort of knowing that they will have a reliable stream of income for the foreseeable future.

However, due to unforeseeable circumstances, the recipient may need immediate cash or larger sums of money to deal with a life-changing event. Fortunately, recipients of structured settlements can choose to sell a portion or their entire settlement for a lump sum payment, a process known as a “structured settlement buyout.”

A structured settlement buyout allows the client to access a significant portion of their structured settlement payments upfront. Essentially, the structured settlement provider or buyer will pay a lump sum for your future payments, in exchange for the right to receive those future payments. This provides the seller with a cash payment that they can use to cover unexpected expenses or make important purchases.

What is a Structured Settlement?

A structured settlement is a legal agreement that is made between a plaintiff, usually someone who has been awarded a settlement or a judgment in a personal injury or wrongful death case, and the defendant, usually an insurance company or a corporation. The agreement sets out a payment plan for the plaintiff, which usually consists of periodic payments.

Structured settlements are generally seen as being good for plaintiffs because they provide a steady stream of income over time, which helps to ensure that the plaintiff has financial security in the long run.

Why Sell your Structured Settlement Payments for a Lump Sum Payment?

Structured settlements can be beneficial in many ways. They can provide financial security for individuals and cover costly medical treatments or long-term care. However, there are times when the recipient of the settlement may want to pursue a lump sum payment instead.

Large purchases or unexpected expenses: Structured settlements provide regular payments over an extended period of time, which is ideal for covering monthly expenses. However, when an individual is faced with unexpected expenses that require a lump sum of money, it can cause financial stress. Structured settlement payments are not designed to cover large purchases like buying a home, paying off debt, or investing in a business. In these cases, a lump sum payment can be more practical.

Investment Opportunities: Structured settlement payments are not designed to provide high returns as they are intended to provide a steady stream of income. However, if an opportunity arises to invest in high-yield investments, it may be more beneficial to sell some or all of the structured settlement payments.

Early Retirement: Receiving a lump sum payment may be advantageous if an individual wants to retire early or needs to stop working because of a medical condition. The lump sum payment can provide financial flexibility in case an unforeseen circumstance arises.

Education Expenses: A lump sum payment can help pay for college expenses, further education, trade school or gaining professional accreditations. A structured settlement payment does not provide enough funds to cover these expenses with minimal or no student loans.

Costly medical treatments: Medical treatments can be costly, especially if the individual has legal settlements pending. A lump sum payment can help cover medical expenses that may not be covered by insurance while also providing financial stability.

How Does Selling Your Structured Settlement Work?

Selling a structured settlement is a simple process that involves the steps described below:

Step 1: Find a Reliable Buyer

The first step in selling a structured settlement is to find a reputable buyer. There are many buyers in the market, so it’s essential to do thorough research to find a buyer who offers the best value proposition.

In general, it is best to work with a buyer who is experienced in buying structured settlements, has a good reputation, and is willing to provide references.

Step 2: Receive a Quote

After finding a reliable buyer, the seller should send over their structured settlement agreement for review. The buyer will then provide a quote, which outlines the lump sum that they are willing to pay in exchange for the structured settlement payments.

The quote will include the discount rate, which is the percentage of the total settlement value that the seller will receive. The discount rate ranges from 10 to 20 percent, depending on the length of the settlement agreement and the current market conditions.

Step 3: Review the Agreement

After the seller receives the quote, they should review the agreement carefully. They should make sure that they understand the terms of the agreement, including the discount rate, the amount of the lump sum payment, and the timeframe for receiving the payment.

Step 4: Approve the Agreement

If the seller accepts the terms of the agreement, they should sign and return it to the buyer. The buyer will then work with the structured settlement provider to complete the transaction. Depending on the state in which the transaction is taking place, the seller may need to obtain court approval for the sale.

Step 5: Receive Payment

After the transaction is complete and the structured settlement provider approves the sale, the seller will receive the lump sum payment.


In conclusion, selling a structured settlement for a lump sum payment can be an effective way to provide financial flexibility, cover unexpected expenses or make important purchases. However, it is essential to consider the terms of the sale carefully and work with a reliable buyer to ensure that the process is legal and secure. Selling your structured settlement can be complex, but if you do your research and work with an experienced buyer, you can get access to the cash you need while ensuring that you still have financial security in the future.