Case Studies in the Sale of Life-Contingent Payments
Life contingent payments are payments that end when the payee dies. However, they can be sold during the payee’s life, often as a way of planning for the future.
Planning for the Future
A single, 56-year-old man had a structured settlement that would pay him life-contingent payments for the rest of his life. However, he wanted to make sure his family would have a more secure financial future. He received $45,000 in the sale of his life-contingent payments and put that money into starting his own construction business. Now, he is his own boss and he has an ongoing asset he can leave to his family when he dies.
A Growing Business
A 48-year old married man and his wife own a landscaping business that provides them with more than $5,000 of income every month to support their family of two young children. He also received $1,000 a month in life-contingent payments. He decided to sell the life-contingent payments due him from 2012 through 2022 for a down payment on a house. With the $60,000 he received from the secondary market, he had enough to cover the down payment and closing costs, with enough left over to buy a second car. The couple’s mortgage payments are less than the rent they had been paying, and with two cars, the husband can use one for work, while his wife uses the other to take the kids to school and run other family errands.