Investors know that a decision to buy a structured settlement is often a good one. This particular financial strategy offers the advantage of creating an ongoing income stream over a long period of time, with a relatively small amount of risk involved. While it is possible to locate the settlements independently and arrange a purchase without the intervention of financial professionals, the most prudent way to buy a structured settlement is to work through a settlement broker.

When you buy a structured payment, it is quickly apparent that this approach is a viable way to generate an ongoing income that is made available incrementally over time. Calculations of this type can be associated with the result of a judgment in a lawsuit, winning a lottery or calculating a claim on an insurance policy. The transaction usually involves offering the recipient a substantial percentage of the total settlement in exchange for rejecting the planned payments to the new owner. The initial beneficiary receives a lump sum payment, which is slightly less than the total amount awarded, while the investor gets to have an uninterrupted income stream that includes income that is slightly more than the lump sum paid to the original holder of the settlement.

One of the main reasons that it makes sense to buy a structured settlement through a broker is that the nature of the calculation is fully investigated in advance. Just as with stocks or bond offerings, brokers will take steps to qualify any structured settlement agreement before presenting an opportunity to the investor. Since brokers have free access to markets where calculations are traded, they can focus on opportunities that are within your preferred price range, have payment schedules that are likely to satisfy your needs, and are considered to be very stable, with little to no chance of a rollover calculation or reduced. In short, working through a broker helps you avoid some of the risk that would be present if you tried to manage the purchase yourself.

The income realized after you buy a structured calculation will depend on the amount of the purchase price. If it is possible to make a purchase for 80% of the total amount of the structured settlement, then over time you will earn 20% of the agreement income. Assuming that at least a portion of those settlement payments are invested in some other types of investments, you can eventually be able to generate even more benefits from the purchase of settlement.