Such settlement technique is first introduced in Canada in the 1970s. The idea was so amazing and it quickly grabbed its position in United States and turned popular in Europe countries finally.Structured settlements refer to compensation payments by periodic allowance system. Usually, such annuity payments established to reimburse the settlement recipients losses of income or working ability in long term.

Monday, 14 September 2009

When to Sell Your Structured Settlement ?

Each individual has different reasons for wanting to sell their structured settlement, however, first you must decide if it is the right decision for you.

A structured settlement often follows a life changing incident, whether it be positive or negative. Due to these circumstances, you may be faced with the need for a big lump sum payment than tiny monthly payments over a quantity of years. So, where do you turn? To a company that can buy your structured settlement from you and turn it in to an immediate payment that you may use on whatever you see fit.

The Benefits of Selling Your Structured Settlement

A big portion of those who receive a structured settlement can benefit from selling it for a lump sum payment. The situations listed in this section represent possible circumstances of individuals that may get the most rewards from selling their structured settlement.

· If you and your relatives decide that this is the time to finally make that big purchase that you have had your eye on. For example, if you have previously been denied mortgages or loans and would like to take this opportunity to buy that dream home you have always wanted. Or if you have a infant or infants who are preparing to be going off to college and you fear you may not have the financial means to support that dream otherwise.

· If you cannot wait to get tiny, spread-out payments over a long duration of time due to a dire financial situation or hefty medical bills and/or lawyer fees. Lots of of the situations that can bring about a structured settlement can also stick the individual with such obligations.

· If you have talked with a financial advisor and both of you feel that you could profit more by investing a lump sum payment, than waiting on monthly payments. If the funds is invested properly, there is a chance that you could finish up with more funds in the finish than your settlement was ever worth. However, this should not be a plan that is entered in to lightly. You should work closely with a financial specialist and feel confident that you have found a great opportunity to invest in.

· If you are of older age and feel that you may not be around long to receive a fair amount of your structured settlement. You may need to the chance to enjoy the benefits of your settlement or may need to secure part of it for your relatives after your passing. This way you can distribute the funds as you see fit instead of relying on lawyers or courts.

No matter what your reason for wanting to sell your structured settlement, choosing this option puts you back in control of funds that is rightly yours. The problem that lots of individuals have with their structured settlements is that the control over their funds is left to lawyers, courts, and the company or persons paying out the settlement. You are now able to say where, how, and - most importantly - when you spend your funds.

· If you don’t plan to use the funds right away, but would put it in to a savings or funds market account to draw interest. This would be best suited for anyone who has a hefty settlement, can find an account with big payoff terms, and designs to keep the majority of the funds in the account for lots of years.

The Drawbacks of Selling Your Structured Settlement

For a few individuals, selling their structured settlement and receiving a lump sum payment may not be in their best interest. One must also assess these situations and decide if they outweigh the reasons you are considering selling your settlement.

· Because you may lose out on a substantial portion of your settlement by selling it, if you are in a financial situation where regular monthly payments will only be a bonus on top of what you already make, waiting out your settlement may be in your best interest. However, if you’re a senior, then you should also take your age and the length of your structured settlement in to consideration. This would be the ideal situation for anyone who is young that they have a great chance of living out the life of their settlement.

· First and foremost, selling you structured settlement means that you will get less funds than you would if you were to keep it. However, for lots of people considering this option, this seems like a win-win situation - they will get one big lump sum payment and the company they sold it to will make a profit in the finish. The nice news is that since you have several companies competing for your settlement, you can select the one that will give you the a portion of the full settlement that you can live with.

· For those reasons, you should also not consider selling your structured settlement if you have an addiction to gambling, shopping, or drugs.

· If you are a person who is poor at managing big sums of funds, then selling your structured settlement may not be right for you. For example, if you are the kind of person who gets a big paycheck every two weeks and finds themselves running low on available funds at the finish of those two weeks, then that may be an indication that needs to be closely looked at. In this type of circumstance, having your settlement portioned out to you on a monthly basis may keep you from spending it quickly. Once your settlement is gone, you will be back at square one.

Most individuals receiving a structured settlement can benefit from selling it to a company that can give them a big lump sum payment or shorten the life of the settlement, if they are older persons, an individual who has enormous expenses due to an accident or court case, anyone in a critical financial position, or one who wishes to make a big purchase for themselves and their relatives. Finding the right company with terms that fit your needs is a key component of making your experience with selling your structured settlement a positive one.

· If your settlement was due to an accident that has put you out of work and the funds from it will replace your monthly income, then keeping the payments on a monthly basis may help your relatives keep your finances in order. However, even in this situation selling your settlement may be best for you if you would like to renegotiate your payments in to a larger sum each month to shorten the life of the settlement.

David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your structured settlement

Friday, 3 July 2009

Getting Cash Now for Your Structured Settlement

Perhaps you’d suffered personal injury in an auto or other accident, you were awarded damages in a product liability case, or you were the victim of medical malpractice or were even the plaintiff in a wrongful death suit. You agreed to a periodic (usually monthly) payment, maybe in the form of a lifetime income stream, that seemed to be the answer to paying your ongoing living expenses and perhaps your medical costs. You made the best decisions you could at the time, with the information you had – based on how life was then, and what you expected for the future.

If you’ve agreed to accept a structured settlement, it’s likely that you felt a sense of relief that your financial uncertainties were being resolved, and that you’d have the funds necessary to pay your bills, support your relatives and go on with your life. When you agreed to the terms of the settlement, hopefully with the help of a financial advisor, you accepted a series of financial payments that made sense for you at that time.

But life never works out as we expect. Maybe you’re on the road to recovery from the accident or other event for which you received the settlement, and need to move and buy a house, get married, go to school, or buy a business. Maybe medical bills or high interest debt is an undue burden on you that you need to resolve now. Or, if your relatives has grown, and your children no longer need for you to provide for their education or other expenses, you may need to spend more of the funds you have coming to you now, instead of later.

What can you do to match your finances – specifically your structured settlement – with the life you now have or need to have? You should always consult an attorney or a financial advisor, but here’s a basic overview of your rights and options in assigning your structured settlement:

Settlements are funded by single premium annuities, issued by insurance companies. Instead of paying you a lump sum amount, the party found responsible for injury or damages to you has paid a one-time lump sum to an insurance company, which has, in turn, invested it. The insurance company has projected the interest rate or securities dividends we will get on the lump sum, and based on the length of time and number of payments you chose or were offered for the structured settlement, we calculated the periodic payment amount you’re now receiving.

So who owns what? The insurance company owns the annuity, and you, as the beneficiary, are entitled to an income stream, or the series of periodic payments. Because you don’t own the underlying asset, the annuity, you therefore can’t sell the annuity contract to another party to get your money. However, under federal and state law you can, with court approval, sell all or a portion of the payments you are entitled to get in the future. In doing so, you can get a lump sum funds payout now.

How can you determine today’s lump sum value of your structured settlement payments? This depends, in part, on the amount of each payment and when it's due. The payment amount and schedule will be outlined in your Structured Settlement Agreement. it's also affected by the financial strength of the issuer of your annuity, because the better the financial position of the issuer, the more likely it's that the purchaser of your funds stream will be paid. The current financial climate, as well as interest rates will also affect your cash-out amount. Your financing company will explain these calculations and assumptions to you.

What are your options? As an annuitant, or the beneficiary of the structured settlement annuity, you are, in most instances, able to assign to a third party the payments you are entitled to get in the future. Some Structured Settlement Agreements state that payments cannot be assigned, and your legal counsel will advise you of options and alternatives if yours is written with such a clause. Fortunately, state laws and recent case law have rendered contracts written with such provisions unenforceable, although other regulations may apply.

- First, you need to take a hard look at whether receiving your funds now will truly be best for you and your relatives. This is a big financial step, not to be taken lightly. That said, your circumstances may have changed sufficiently so that a lump sum or partial payment in the form of a lump sum makes sense, and is better for your family’s current and future lifestyle and financial stability.

What steps do you need to take?

- Next, contact a reliable financing company that purchases structured settlement income streams. we can guide you through the routine and help you consider alternatives, such as the sale of a portion of your structured settlement income stream, if this best meets your needs.

- The financing company will assist you by hiring an attorney experienced in structured settlement assignments. The attorney will explain to the court your desire to change your settlement, and any changes in your life that have caused you to make this decision. Because the attorney will be petitioning for judicial approval, he will need to understand your current finances, obligations and desires.

- What can you expect now? one time you have selected a finance company and attorney, the courts will put you on the docket and hear your petition for receiving your funds in a lump sum. They’ll need details of the future payments due you, the proposed amount of the lump sum distribution, and any costs you will incur as a result of restructuring your settlement. Their basis for granting you an approval is satisfying themselves that the assignment of your payments to another party and receipt of current funds will be in your best interest and in the best interests of any dependents you may have.

- Having all your documentation and agreements, and furnishing them promptly to your advisors and potential funding sources is key to receiving a funds payout in the shortest possible time. Because court approval is required, the time from the initiation of the request to the final approval is typically 45-90 days. So, as with other large financial decisions, such as obtaining a mortgage or refinancing, it’s in your best interest to begin the routine with a little time to spare, before you feel a time crunch. You deserve an equitable deal, as quickly as is possible, not the deal you can make in the least amount of time.

- one time you’ve agreed on a lump sum amount with your finance company, and obtained court approval, you’ll get a wire transfer or a cashier’s check for your lump sum amount. You’ll now have the funds you need – right when you need it most.

Monday, 29 June 2009

What Are Viatical Settlements?

The settlements came in to being in the late 1980s with the when the AIDS epidemic first hit & started claiming victims. Because the early victims of AIDS in the United States were mostly gay men who did not have dependents & were not old, the men found that selling a life insurance owner that was acquired through work or other investment practices was a way of extracting the value of the owner while the policyholder was still alive. In lots of of these situations, the individuals that would obtain the funds in the event of the death were the parents of the owner holders. These parents typically had their own life insurance policies & were not in need of their children's policies.

Before there were life settlements, there were viatical settlements. A viatical settlement, when it first originated, was a way of getting the most value for one's life insurance owner in the event of a chronic illness or other cause of death which would permit a person to pay for his or her care.

At the time this settlement came in to existence, the mortality rate for AIDS was high & a person did not expect to live long after the diagnosis was made. This combination made investors reasonably certain that they would be able to collect on their investment in a relatively short time. The combination of events caused a huge surge in the number of viatical settlements that were entered in to as both the buyer & seller saw huge potential benefits.

In general, a viatical settlement is the sale of a life insurance owner by the owner owner before the owner matures. The sale is conducted for a price that is less than the face value of the owner but is still above the premiums paid or the current funds surrender value. The funds surrender value is the amount of funds that the owner holder would obtain if they or he were to turn the life insurance owner back over to the insurance company.

three times the price has been set, the sale will go through, most of the time. The seller, or owner holder, is given an immediate funds settlement & the buyer has made an investment. This type of settlement is usually only used in individuals that have a shorter life expectancy.

As time went on, viatical settlements developed a bad name & reputation in the investing community. The companies that ended up buying the policies from the owner holders usually resold them to individual investors & gave their salespeople huge commissions.

Wednesday, 6 May 2009

Buy structured settlements

Structured settlements offer several advantages that make them a popular choice with individuals. The foremost benefit of a structured settlement is that it provides currency at regular intervals and the currency is free of state as well as federal taxes. As against this, the interest accrued from investments made from currency obtained through a lump sum is subject to federal and state tax. Also, often individuals who come in to currency by acquiring a lump sum are unable to invest it wisely and often spend it wastefully, this isn't possible with a structured settlement where small amounts are made available periodically and therefore a person's spending is regulated.
Loss of money that has been acquired through an installment of a structured settlement is not as severe as loss of money acquired through a lump sum payment. The small amounts are easy to manage and also do not excite the interest of unscrupulous elements as compared to hefty lump sum payments.

With a structured settlement, an individual does not need to worry about planning for long-term investments as the periodic payments can be structured to take adequate care of one's needs post retirement or in the case of a debilitating injury. Structured settlements are favored by both the defendant and the plaintiff as we can be settled without having to be going to court. This saves time and is often cheaper for the defendant who would otherwise have to pay more with an in-court settlement. The risks involved for both parties are reduced with a structured settlement as per which the defendant is contractually bound to pay the plaintiff. Also, attorney costs for a out-of-court negotiated structured settlement are lower than what we would be if a litigation were to be filed in court. Attorney fees can come down by as much as 8% to 10% for a structured settlement achieved out of court. This can mean a saving of thousands of dollars for the defendant as structured settlements can often run in to over a million dollars.

Structured settlements allow insurance companies to provide payment to claimants at a lower cost and the payment schedule can be set according to a claimant's convenience. A structured settlement can be used to provide for certain costs of an individual right from the stage when he is a minor. The money can be disbursed for college expenses or to meet the costs of higher education. Periodic lump sums made available to an injured person can be used to make medicinal purchases and sustain oneself.

Three reason for the popularity of structured settlements is that we can be availed in a variety of formats; these include lump sum payments made periodically when funds are required for medical expenses, education, or marriage; percentage increase annuities that offer annually increasing payments that help to counter inflation; deferred annuities that enable to defer the commencement of payment to a later date; period certain annuities that can be combined with a lump sum payment for receiving payment over a fixed period; and joint and survivor annuities in which payments are continued to the survivor annuitant if the primary annuitant passes away.

Monday, 4 May 2009

Making a structured settlement claims

The completion of a structured settlement requires contracted agreement from six major parties: the settlement insurer and the settlement claimant. The insurer can be an insurance company, a qualified settlement fund trustee, or even an individual defendant (in rare case).

In the beginning of a claiming technique, the insurer have to promises to pay future periodic payments to the claimant with all or a portion of the negotiated personal injury damages in exchange for a release by a contractual agreement.

To finalized, the insurer will need to make an assignment of its obligation to pay future periodic payments to a third-party. The assignee assumes this obligation. The plaintiff agrees to the assignment in the release and agrees to look to the assignee as the obligor for the promised future periodic payments.

If the offer is agreed by the claimant, he or he will release the claim in exchange for the promise by the insurer by signing off the contractual agreement. The settlement can consists of one or more future benefit payments to claimant in addition to immediate cash items (for attorney fees, liens).

The assignee receives funds from the Defendant/Insurer or QSF Trustee and uses these funds to purchase an annuity contract in an amount sufficient to fund the periodic payment obligation it's assumed. The assignee owns the annuity contract and may either make payments directly to the Plaintiff/Claimant or may direct that the annuity issuer make the payments.

Advantages with structured settlement

Picture an 18 years elderly with a huge pile of money from lump sum settlement, the risks of overspend or being conned is high. Now imagine the same person gets a fix smaller periodic amount from structured settlement, the risk of being targeted by con man is maximum. So is the chance of wasting the money recklessly.

Structured settlement in general comes with a few advantages that conventional lump sum money settlements do not give. A few major plus points include the elimination of dissipation risks involve with lump sum money settlement and tax exemption on the settlement income.

In United States, favorable tax treatment rules have been extended to the money received under annuity payment agreement in order to encourage the use of structured settlement system. For instant, money income from structured settlement payment are not included in gross income when filing tax, this means that the payment from structured settlement is non-taxable.