Considering that there is now this whole industry that focuses on structured settlements annuities trade, it should not be a surprise to any one to note that many recipients of structured payments annuities (and the guaranteed revenue stream resulting from the periodic payment arrangements thereof) are selling it off for a lump sum cash payout.

Structured payment arrangements are primarily designed to provide a steady, guaranteed revenue stream for an injured party. The government provides significant tax subsidy to those that resist the temptation of holding in their hands a large bundle of cash received in the form of a one-time lump sum payout. Many recipients are indeed taking the safer route and opting for the steady, and reliable revenue stream that is guaranteed to provide for their ongoing needs and desires.

Why is it then that so many recipients of structured settlement arrangements are selling off their ongoing and assured revenue stream for a one-time lump sum payout -often at a deep discount?

There are many reasons why some individuals who have elected to be compensated in the form of structured settlement arrangements would consider to sell some (if not all) of their rights to their structured payments under such arrangement. A few of such contributing factors are as follows:

• Changing Times Lead to Changing Needs: Over time, everyone's personal needs, life circumstances, and desires change. For example, it may just be that over time, a recipient's health-needs have grown beyond what can be supported within the periodic payment that a structured settlement allows for.
  
• Desire to Explore Newer, Better Treatment Options: New treatment options, drug therapies, and better health care techniques are being developed at all the time. When one learns of a new technological advancement that offers better care, or significantly improves one's quality of life, who would not want to explore those options?
  
• Deterioration of Health: If an individual has reasons to believe that his health is quickly deteriorating, or that his lifespan will be considerably shorter than what was assumed to be at the time the structured settlement arrangement was being crafted, then the individual may consider selling off the structured settlement payment stream so that he would have access to larger annual payments during whatever time he may believe he has.
  
• Desire to Have Direct Over Control of Arrangement: Some individuals may just feel better having a direct control over how the details of their finances are managed.
  
• Upon Learning that True Value of His Structured Settlement is No Much Better Than What It Would Now Sell For: It is not uncommon for a recipient to realize, on a later date, that he had initially miscalculated/misunderstood the true/comparative value of the structured settlement, and that the residual value of his structured settlement is not a whole lot more than what it would presently sell for. Not many recipients realize this early on that the value of deferred payments is almost always not much greater than the lump sum it would sell for -at any particular time.
  
• Driven by a Desire to Generate Better Financial Returns: If a person truly believes that (s)he can achieve better financial returns by self-managing/investing his/her assets, that person is more than likely to consider opting for a lumpsum amount. Similarly, if an individual truly thinks that he would get better financial rewards by investing in his own business, he would probably be more inclined to sell off his right to a structured settlement than others.

Such decisions are usually founded in some form of comparative analysis that suggests one would be better off foregoing a structured settlement arrangement in lieu of a lump sum payment.

Considering that all those that are involved in the "structured settlements trade" are doing so for profit, it is no wonder they only offer to buy a structured annuity at a significantly discounted rate. Therefore, one must carefully weigh the actual purchase price being offered as compared to the expected fair-market value of the said income stream being sold at a discount.

Regardless of the motivation that drives one to consider selling off one's structured settlement payments for a one time lump sum amount, it is important to keep in mind that in doing so, he would in fact be converting his tax-free revenue stream (investment returns) into taxable returns -especially if it were to be invested by anyone outside of the original structured settlement arrangement.