The process of cashing out a structured settlement is more commonly known as structured settlement factoring, which is the process of transferring the rights to structured settlement payments. Annuitants have several options when cashing out structured settlement payments, including the number of payments to cash out, amount of each payment to cash out, and company that will complete the factoring transaction.
A few life insurance companies do offer services to help their policy holders cash out structured settlement payments. These services are ideal for annuitants who will net $10,000 or less after completion of the factoring transaction, due to the standard 12% discount rate that these companies offer. Traditional factoring companies will not complete a transaction of this amount with a 12 % discount rate.
For larger transactions, ($10k and up) a traditional factoring company is the way to go. These transactions can be completed with discount rates as low as 7.5%, depending on the size and competition involved in the transaction.
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