How Do Structured Settlement Annuities Work?

If you have been into legal battles, especially when you are up against big corporations, the situation is most likely to end up with something like a structured settlement annuity. If you are not familiar with the term, the structured settlement annuity is a financial arrangement and sort of an insurance that you will be paid accordingly.

This makes it easier for the other party to pay up even when the amount is so high because they are not required to come up with a lump sum. The latter will be very hard to produce and it may affect their business tremendously.

With the advent of paying cash for structured settlement payments, both parties will be in a win-win situation. The one who will pay can do it easily by opting for structured settlement annuity and you will get what you rightfully deserve.

This type of court settlement has been around since the 70s. This includes periodic payments that you will accept as the claimant to agree that you want all differences resolved. This was a good substitute to lump sum settlements. And the concept of accepting cash for structured settlements was first practiced in countries like the United States and Canada.

As of today, this idea that may even lead to selling structured settlement is included on the statutory tort law in various common law nations like the US, Australia, England and Canada. Each country may vary on their definition of the term and the processes involved. Some countries include on the structure the benefits, spendthrift requirements and income tax matters.

The Process

If the idea is still unclear and you may want to find out how all these would lead to selling structured settlements or how some people or companies offer to buy structured settlement, here is a brief rundown of what usually goes into the scene.

If you are the injured party, you are the claimant in this case. The insurance carrier in this scenario is the defendant. When you agree to settle a tort suit with the defendant, both parties will also have to agree on the terms and condition.

You will drop the charges against the defendant and they will pay the agreed amount on a series of payments that can be done periodically or resort to companies that will offer to purchase structured settlement. You are now more secured that you will get the whole amount eventually. This is better than to accept promises of lump sum payments, especially if the defendant cannot really shoulder such amount and hand it to you immediately.

Marc is in the structured settlement industry and has been a financial advisor to countless people in tort lawsuits. Learn more about types of annuities and how structured settlement annuities will work for you.

Structured Settlement Answers - Information You Must Know

The following article provides some answers to the most common questions about structured settlements. By the time you're done reading this, hopefully you'll have a better understanding of structured settlement answers and information.

Who is eligible for structured settlements?

Anyone involved in an accident or lawsuit can be offered a structured settlement as part of the court's ruling. It's especially popular with auto accident and medical malpractice victims. However, no one is ineligible from receiving structured settlements.

Why do people sell their settlements?

Many people experience great financial distress during their situation that causes them to receive a settlement in the first place. By selling their settlement, they're able to have a large sum of money to do what they need, rather than getting a tiny amount every month or so. Some people just sell their settlements to finance an education or other large purchase, which is really quite frivolous at times. Education or a home is one thing, but selling a settlement to buy a new car or a boat is a little irresponsible.

Who can I sell my settlement to, and how do I find them?

There are plenty of companies that will purchase structured settlements from people for various rates. To find these companies you can look in your phone book, or simply do a search online for companies. Make sure that you research all the companies before you agree to anything to ensure you're working with a legitimate company.

What do I lose by selling for a lump sum?

You'll lose some of your settlement by selling it off to a settlement funding company. However, if you're in dire need of financial salvation, the money you don't get will be well worth the money that you do get. You'll surrender all rights to your settlement to the purchaser, leaving you with no legal ties to the money. They will take care of everything else between them and the company that's paying the settlement.

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Buying a Structured Settlement

There are companies which want to purchase an individual's structured settlement. Don't think they are doing it out of benevolence or charity. Those specific companies which buy structured settlements do it because of the profit they can make.

The value of the sold structured settlement is not the same as the lumpsome amount got by the individual who is going in for sale of either the entire settlement or a part of it.

The profit that is made by the structured settlement companies is reinvested in the best investment options of contemporary times. The running costs of these companies, salaries of employees, and advertisement costs all come from the profits earned from buying structured settlements.

While selecting a company that will buy your structured settlement you should always go in for financially sound companies as their chances of going bankrupt are less. Such a concern will usually enjoy a good market standing or reputation.

So they will be able to offer you the best market rate, wont have to take loans from a bank to pay the clients, can rely on their own reserve of money for making payments to clients; the role/service of middlemen is absent/not required.

These companies stay away from brokers because roping in a broker would involve paying him money for his services from the company's own pocket.

Non-taxable transactions and a guaranteed safe and steady cash flow are what make purchase of structured settlements an attractive option for these companies. Many individuals are in need of quick cash. A structured settlement will be a loss for them. They would infinitely prefer to swap their settlement for lumpsome cash.

Purchasing a structured settlement is not much of a work. What involves hassle and consumes time is the obtaining of court approval following the laws laid down by the federal government and prevalent state legislative. A lot of effort also goes into marketing.

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