Depending on the nature, Buy Structured Settlements can be spread over a person's lifetime, or just over a few years. Most of such settlements include an immediate cash payment and are set up as an annuity generally orchestrated by insurance companies.
However, despite the attractive initial payment plan, a financial emergency, unforeseen medical expenses, or other compelling reasons can force many people to rethink the need for future payments.
They may decide to sell their structured settlements for some such reasons. Irrespective of the reason, the fact is that a structured settlement payment stream is a personal financial asset that can be bought or sold today.
A number of companies these days purchase a structured settlement if one is willing to sell it. A structured settlement deal requires execution of a Transfer and Assignment Agreement with the seller following full disclosure of the price and other terms of the contract.
The sale is announced to all interested parties which must be cleared by a judge. As the immediate financial needs vary from customer to customer, the buying companies evaluate each requirement and accordingly buy the whole or a portion of a future payment stream.
Assessing the specific requirements of sellers, these companies offer various purchase options like lump sum payoff, partial lump sum payout and restructured payment stream to choose from.
For those who have bought an annuity policy and are receiving payments on a periodic basis, some buying companies are ready to provide immediate cash if they are in immediate need of money.
At present, an annuity can grow through compound interest and the annuitant does not have to pay taxes till the funds he receives are treated as income. Normally, investors prefer a variable annuity as it helps them stay ahead of inflation or opt for a fixed annuity in which the rates of return and income stream are predictable.
The purchasing companies offer lottery winners a lump sum amount in lieu of their long-term payment streams. This scheme provides those fortune-blessed people a chance to better utilize their manna from heaven and equips them well for the future. The companies that purchase a structured settlement actually make a profit and use the money to make investments in suitable fields.
Sunday, April 5, 2009
Friday, April 3, 2009
Cash for Annuities
An annuity is like a contract between the annuity buyer and an institution like an insurance company aimed at providing regular, additional income. On the other hand, a Structured Settlement System is the compensation agreement between a plaintiff and the insurance company (defendant) for the periodic, long term and tax-free payments instead of a lump sum payment for personal injuries.
There are basically two categories of annuities namely "immediate" and "deferred". In the case of immediate annuities, the frequency of making periodic payments is very high. With deferred annuities, are "fixed deferred" annuities and "variable differed". Fixed annuities offer guaranteed income to the annuitant for a fixed time period. The rate of return depends on the cash value of the account and the life expectancy. The company invests in low risk government securities and bonds that guarantees a rate of return.
The rate of return on variable annuities depends on the performance of the underlying investments of the annuity. However, people prefer variable annuity as excess income and the total premium is tax-free. The possibility of achieving long-term returns is higher in the case of variable annuities when compared to fixed annuities. Even for retired people who look for a tax-free regular income after retirement variable annuities is a good way to go.
However, before buying any type of annuity, the buyer should obtain information about the insurance company that is being considered. The company performance is important. Buyers can contact annuity brokers or agents to discuss options.
There are basically two categories of annuities namely "immediate" and "deferred". In the case of immediate annuities, the frequency of making periodic payments is very high. With deferred annuities, are "fixed deferred" annuities and "variable differed". Fixed annuities offer guaranteed income to the annuitant for a fixed time period. The rate of return depends on the cash value of the account and the life expectancy. The company invests in low risk government securities and bonds that guarantees a rate of return.
The rate of return on variable annuities depends on the performance of the underlying investments of the annuity. However, people prefer variable annuity as excess income and the total premium is tax-free. The possibility of achieving long-term returns is higher in the case of variable annuities when compared to fixed annuities. Even for retired people who look for a tax-free regular income after retirement variable annuities is a good way to go.
However, before buying any type of annuity, the buyer should obtain information about the insurance company that is being considered. The company performance is important. Buyers can contact annuity brokers or agents to discuss options.
Monday, March 30, 2009
Structured Settlement Loans
Court judgments where a structured settlement is awarded are called periodic payment judgments. If a claimant has been awarded a financial resolution in which he or she will receive periodic payments instead of a lump sum, a loan may be extended against the value of the settlement.
Such loans are offered by many financial organizations specializing in legal funding. The practice is not held in very high esteem, since the laws concerning structured settlements are designed to protect the recipient from exploitation. However, the fact remains that funds received through a structured settlement represent a form of income, and loans against any sort of regular income are always available.
Availing of such a loan is often the only recourse open to a claimant for obtaining a substantial amount of money. A structured settlement is treated as a special income tax category and cannot be traded in for a lump sum settlement.
The laws surrounding structured settlements are rather specific, and obtaining a loan against them is not as easy as it may sound. Financiers who claim otherwise are usually not reliable. In legal terms, using a structured settlement as collateral for anything at all, including a loan of any kind may void the whole deal. Availing of such a loan is a matter best left to a knowledgeable attorney or law-savvy accountant.
In cases where loans are taken against a structured settlement, the purpose is usually not to obtain hard cash but to buy a house or some other asset. In such cases, the money coming from the settlement may be used to pay regular installments and would not represent a loan in the classic sense of the word.
Such loans are offered by many financial organizations specializing in legal funding. The practice is not held in very high esteem, since the laws concerning structured settlements are designed to protect the recipient from exploitation. However, the fact remains that funds received through a structured settlement represent a form of income, and loans against any sort of regular income are always available.
Availing of such a loan is often the only recourse open to a claimant for obtaining a substantial amount of money. A structured settlement is treated as a special income tax category and cannot be traded in for a lump sum settlement.
The laws surrounding structured settlements are rather specific, and obtaining a loan against them is not as easy as it may sound. Financiers who claim otherwise are usually not reliable. In legal terms, using a structured settlement as collateral for anything at all, including a loan of any kind may void the whole deal. Availing of such a loan is a matter best left to a knowledgeable attorney or law-savvy accountant.
In cases where loans are taken against a structured settlement, the purpose is usually not to obtain hard cash but to buy a house or some other asset. In such cases, the money coming from the settlement may be used to pay regular installments and would not represent a loan in the classic sense of the word.
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