What is a structured settlement? Essentially it is an agreement reached between an injury claimant and a defendant whereby the injured party is paid a certain amount of money every month for a certain period of time. Structured settlement payment is referred to as an annuity, and this money is not subject to federal or state tax. It is usually advantageous to both parties, as the victim receives money every month to cover payments such as medical bills, rehabilitation, in-home care, etc. and the payer is able to settle the case and spread payments over a period of months or years to soften the blow.

However, for many people selling structured settlement notes makes sense. They might be at retirement age, need to make a big purchase or stumble upon an amazing investment opportunity. As such, a lump sum would be much more useful to them rather than small payments coming in every month. Even though the lump sum would be less than the total settlement amount, investing that money in even at a moderate rate of return could yield many times the initial amount.

That’s why selling structured settlements is appealing. Also, you don’t have to sell the entire note, you could sell a portion of it, called a partial, and retain the rest of the payments for yourself. That way you get a lump sum of cash for whatever you need it for and the residual income of the remaining annuity. There are other ways to arrange it as well and a qualified note buyer can spell out all of your options.