Choosing a structured settlement investment as an option for for financial gain can be a viable method of acquiring profit. These settlements are usually paid out to individuals over a period of time and may be the result of an insurance pay out, lottery winnings, annuities or a court judgment. Receiving money that is owed over time in small increments may not have the same kind of life changing possibilities that a onetime payment of a large amount of money can have. This is the main attraction that draws individuals to investors who are willing to pay money for structured settlement payments.
The decision to participate in a structured settlement investment can depend upon a variety of factors. Pressing financial needs can be very persuasive for the owners of these settlements. Mounting debts, needed home repairs, medical bills, or a child's education can be just some of the reasons that someone might decide to sell off future payments. Many recipients of settlement disbursements would rather have a lump sum payment instead of receiving a cash payout over a number of years. An immediate cash payout would benefit them during financial hardship or to add to their current lifestyle. This is an option for people who are unable to make investments elsewhere through savings, money markets, etc. Spend a little time learning about the process for receiving a cash payout.
An investment into structured settlements allows an individual to make a onetime payment to the holder of the settlement. Then, the investor simply sits backs and collects the payments over the lifetime of the settlement. Since there is such a difference between the amount of money that is paid to the settlement holder originally and the amount of money that is paid in total to the settlement purchaser, the investment return here is higher than what most expect.
A structured settlement investment requires a little more than a willing buyer paired with a willing seller. While such arrangements can be a financial opportunity for both parties, the law does not allow individuals to sell off such assets without court approval.
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Monday, September 28, 2009
Tuesday, September 15, 2009
Settlement Payments for Mortgages
When the Internal Revenue Code section 5891 was signed into law by President George W. Bush in 2001, the owners of structured settlements were allowed to have an option to sell their structured settlements to a secondary market. This law gave way to a solution for many structured settlement owners with financial problems. There are now many companies willing to pay cash for structured settlement payments being sold to them.
One of the common financial challenges of most people is their house mortgage. With the prices of almost everything going up, people with fixed salary usually have a hard time coping up and managing payments of their debts especially covering for house mortgages. It is advisable that before deciding to sell your settlement arrangement, you should do your own extensive research about the process and the industry. This system involves your money and thus, should not be taken lightly. You may also do your research about the companies that purchase settlements and find what their rates are so you would know which company will pay you better.
You may also seek an independent professional advice before selling your rights to your structural settlement so that you may be ensured that you will receive a fair market value from the buyer.
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One of the common financial challenges of most people is their house mortgage. With the prices of almost everything going up, people with fixed salary usually have a hard time coping up and managing payments of their debts especially covering for house mortgages. It is advisable that before deciding to sell your settlement arrangement, you should do your own extensive research about the process and the industry. This system involves your money and thus, should not be taken lightly. You may also do your research about the companies that purchase settlements and find what their rates are so you would know which company will pay you better.
You may also seek an independent professional advice before selling your rights to your structural settlement so that you may be ensured that you will receive a fair market value from the buyer.
Source
Monday, September 7, 2009
4 reasons for you to take a structured settlement
4 best reasons for you to take a structured settlement :-
1. To pay off credit cards with high interest rates .
2. To pay down a home mortgage to reduce monthly payments .
.
3. To pay for children's college tuition
4. Emergency expences due to medical problems or an accident.
Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:
Excessive Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.
Overstated Value - Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing - There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.
Life Expectancy - It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies - For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
Source
1. To pay off credit cards with high interest rates .
2. To pay down a home mortgage to reduce monthly payments .
.
3. To pay for children's college tuition
4. Emergency expences due to medical problems or an accident.
Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:
Excessive Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.
Overstated Value - Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing - There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.
Life Expectancy - It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies - For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
Source
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