Finding Buyers and Pricing Flashcards
6 cards from real Sell Structured Settlement practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Finding Buyers and Pricing flashcards as text
Which of the following is the most reliable way for a payee to find legitimate structured settlement buyers?
Answer: Researching NASP (National Association of Settlement Purchasers) member companies and comparing quotes
NASP member companies have agreed to ethical standards; researching and comparing multiple NASP members helps payees identify reputable buyers and competitive offers.
What organization represents structured settlement purchasing companies in the US?
Answer: NASP (National Association of Settlement Purchasers)
NASP is the primary trade association for companies that purchase structured settlement payment rights, advocating for industry standards and consumer protection.
What is the standard way a factoring company calculates its offer to a structured settlement payee?
Answer: By discounting the future payment stream to a present value using the company's chosen discount rate
Factoring companies apply a proprietary discount rate to each future payment to calculate a present value, which becomes the gross offer — minus fees and costs to arrive at the net offer.
What does a 'bid sheet' from a factoring company typically include?
Answer: The proposed lump sum, the discount rate applied, fees, and a breakdown of payments being purchased
A bid sheet (or quote sheet) breaks down the offer — showing which payments are included, the discount rate, all fees and closing costs, and the net cash to be received by the payee.
Which of the following is a major red flag indicating a potentially predatory structured settlement buyer?
Answer: The buyer discourages the payee from seeking independent legal or financial advice
Legitimate factoring companies encourage independent advice; a buyer who pressures the payee not to consult an attorney or advisor is trying to prevent informed decision-making.
What factor most directly allows a payee to increase the lump sum offered by factoring companies?
Answer: Creating competitive pressure by obtaining multiple written quotes
Multiple competing quotes create leverage — factoring companies may lower their discount rates to win the business, directly increasing the net lump sum the payee receives.