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My Structured Settlement

A structured settlement is a large sum of money that is dispersed over a period of time rather than given in one large amount. Many times an agreement between an individual and the payer elect to have a set amount of payments made over a period of time. The recipient will receive the overall amount in monthly or yearly draws to spread out the payments for tax or other financial planning reasons.

What you need to know about Selling your Life Insurance Benefit 3

Beware of Life Settlement Offers – Selling your Life Insurance can be Costly. 4

What to Look for when putting a Structured Settlement Up for Sale. 5

3 Types of Structured Settlement Payouts. 6

Does your Structured Settlement Broker have a Hidden Agenda?. 7

The downside of getting a Structured Settlement Loan. 8

3 things you may want to Negotiate into your Structured Settlement 9

3 things to look for when setting up a Structured Settlement 10

What you need to know about Selling your Life Insurance Benefit

Life insurance is basic contract between an individual and an insurance company whereby the individual will pay a monthly premium over the term of the agreement. When the individual dies, the amount of the policy is paid out to the individual’s beneficiaries.

If you are a parent you know how important life insurance is to the ones who depend on you for financial stability and support. As you grow older and into your senior years, your beneficiaries may not need to depend on you for financial support when you pass. Your current financial and medical situation may be in decline and you do have a potential option of selling your life insurance policy as a way to help with medical bills and other health and financial issues.

This transaction, called a life settlement is a way to receive a large cash advance prior to your death. Although this may be a consideration for some, it is important to understand the pitfalls and of this arrangement.

Here is how it works:

1. An investment company will offer to pay you a discounted amount that is less than the benefit your family would receive after your death.

2. The company would pay your monthly premium for as long as you are alive

3. When you pass, the full amount of the benefit would be paid to the investment company

In summary, a Life settlement arrangement may provide a way for you to receive a large amount of money, but you should consider the ramifications of this arrangement and proceed carefully before signing any agreements.

Beware of Life Settlement Offers – Selling your Life Insurance can be Costly

Everyone knows that life insurance is a contractual agreement between a person and their insurance provider whereby the individual pays a monthly premium until the individual dies. At that time the amount of the policy is paid out to the individual’s beneficiaries for financial support.

Every parent knows how important life insurance is to the ones who depend on them for financial stability. As you grow older and into your senior years, your beneficiaries may be grown and not necessarily need this benefit when you pass.

Individuals who struggle in their later years with financial and medical issues have a potential option of selling their life insurance policy as a way to help. These transactions are known as life settlements and can be a real financial lifesaver for senior citizens who are barely getting by. As boomers grow into their senior years, they may be approached by individuals who prey on unsuspecting seniors into selling their life insurance as a way to generate cash.

Companies who invest in life settlements will generally pay a hefty discount on the benefit amount in exchange for waiting until you pass before collecting on the insurance benefit you originally agreed upon with your provider.

In summary, individuals who approach unsuspecting seniors may get a hefty commission or referral fee on the transaction and may not be acting in the best interests of the policy holder. Therefore it is prudent to be wary of any individual or company offering to purchase your life insurance policy for an upfront cash payment.

What to Look for when putting a Structured Settlement Up for Sale

A structured settlement is a large amount of money that has an agreement in place to break down the amount into payments and spread over a period of time. Many times this agreement is made between an individual and the payer to ensure the amounts are applied sustain the individual over a long period of time. The recipient will receive the entire amount on a weekly, bi-weekly or other payment schedule.

Structured settlements can be initiated from lottery or casino jackpot winnings, litigation or insurance awards. In some situations an individual can inherit an annuity stream from the estate of an individual who has passed.

Unfortunately, there can be downsides to this type of arrangement and you should be aware of the potential financial impacts that may occur:

1. There are many companies out there who will gladly pay you a single amount to receive the monthly income stream for the term of the agreement, however they will heavily discount the amount you get to make a profit from the transaction.

2. Structured Settlements were designed to provide a way for an individual to manage their money and provide a consistent source of funds to pay bills and etc. Getting a single lump sum can be a financial disaster if you do not have the will power to invest the money wisely. There have been many who have been left with no future after blowing the entire amount on depreciable assets like cars, boats and trips to the Caribbean.

3. Accepting a large amount of money through a settlement loan may trigger significant tax burden to the individual that received the money. This alone can be a reason to avoid a structured settlement sale.

In summary, if you are receiving a monthly income stream from a structured settlement and want to get the money faster, there are several reasons you may want to proceed carefully before signing an agreement with a company who will be making a substantial profit from your decision.

3 Types of Structured Settlement Payouts

A structured settlement is a large amount of money awarded to an individual with an explicit disbursement schedule. The funds are paid as an electronic funds transfer to the recipient bank account over a period of time. This provides a steady income stream over the term of the agreement and usually gives a better rate of return than if the individual received a lump sum of cash and re-invested that money elsewhere.

Structured settlements can be generated from lottery payouts, insurance awards or inherited annuities from a relative’s estate. The bottom line is that a structured settlement is a monthly income stream that is intended to help the recipient pay for living and medical expenses if applicable throughout the term of the agreement.

When defining a structured settlement, it is important to provide future flexibility into the agreement so that you will not only receive a steady income stream, but allow for future life situations and challenges such as college tuition for the kids.

Building flexibility into your agreement should be something your financial settlement advisor should be able to help you with. Some of the options you might consider are:

1. Future Cash Payments – In addition to receiving steady income on a regular basis, you may want to include set amounts added as separate payments in the future. This will provide an individual the ability to receive exact amounts on specific intervals as part of the terms of the settlement.

2. Graduated payments – As part of your agreement, there may be an option to have the settlement configured to have graduating payments on specific anniversaries of the award. These graduated payments would be pre-determined and agreed to as part of the structured settlement.

3. A clause that allows the payments to continue in the event the primary recipient passes. This will keep the agreement in place to ensure the total settlement is paid to the estate or other party that may have been part of the agreement.

In conclusion, your structured settlement should be based not only the immediate needs, but also have enough flexibility built into the agreement for the future. This will help ensure the benefits of the agreement are realized over the life of the individual receiving the annuity.

Does your Structured Settlement Broker have a Hidden Agenda?

A structured settlement is a large amount of money awarded to an individual with a specific payout schedule. The funds are disbursed over a period of time rather than given in one large amount to help the recipient pay for living expenses and monthly bills if the award was made through litigation.

Structured settlements can be generated from lottery payouts, insurance awards or inherited annuities from a relative’s estate. The bottom line is that a structured settlement is a monthly income stream that continues throughout the term of the agreement.

A Settlement Broker is an individual that can analyze the various factors of a settlement and apply best practice techniques to ensure the party receiving the settlement is receiving the best possible income stream for their immediate and future needs.

When defining a structured settlement, it is important to provide future flexibility into the agreement so that the individual will not only receive a steady income stream, but allow for future challenges and needs that can occur over the term of the agreement.

A settlement broker or financial advisor that does not have a hidden agenda would be the best advisor to choose for your settlement agreement. Unfortunately, once an individual comes into a great deal of money, a multitude of unscrupulous individuals can guide the individual in directions that may not be in their best interests. Some of these brokers or advisors might have ties to companies that would offer them referral fees or commission bonuses which may taint their perspective on giving the best advice.

In summary, the selection of a structured settlement broker is an important aspect of ensuring your current and future needs will be met over the term of the settlement agreement. Make sure you do your research before contracting with a company to assist you in designing your settlement agreement.

The downside of getting a Structured Settlement Loan

However, as anyone knows unforeseen situations do come up that may require access to more cash than a person has in the bank. Usually a loan is taken out as mortgage on the home or unsecured debt in the form of credit cards etc. but, you can also take a loan against your structured settlement payments you receive as well. If you have access to a monthly income stream through a structured settlement, you can sell all or part of these payments to get a larger amount of money in a shorter time period.

Unfortunately, there are downsides to this type of arrangement that everyone should be aware of before pursuing this type of agreement.

1. There are many companies out there who will gladly pay you a lump sum to receive the monthly income stream. But the cost of getting your money early may be extreme. These companies will pay you a discounted rate for the purpose of making a lot of money over the life of the annuity.

2. Structured Settlements were designed to provide a way for an individual to manage their money and provide a consistent source of funds to pay bills and etc. Receiving a single amount of money can be an extreme temptation to blow the money on luxury items rather than what is was meant for.

3 things you may want to Negotiate into your Structured Settlement

A structured settlement is a large amount of money awarded to an individual with specific terms and conditions with regards to the payout schedule. The amount of the award is made over a period of time rather than given in one large amount. The recipient will receive the overall amount in monthly or yearly draws to spread out the payments and can allow for better tax and financial planning.

Structured settlements can be generated from lottery winnings, litigation or insurance awards from workers compensation or personal injury cases. In some instances, you can inherit an annuity or scheduled monthly payments from a relative that has passed.

When negotiating your settlement, you may want to consider the following items:

1. Sometimes a settlement is due to a personal injury situation that could decrease the individual’s life expectancy. When considering your structured settlement, you may want to stipulate that if you pass before the agreed upon payments are complete, the balance will be paid to your estate so that the agreed upon amount is fully paid. If this is not part of your agreement, the amount paid could be significantly less than what was due.

2. Structure the agreement so that the annuities are funded through multiple providers or companies. This will help ensure funds are still available and that payments continue over the entire period if one carrier goes into bankruptcy.

3. Planning for steady monthly payments will help with day to day expenses, but you may want to negotiate larger disbursements on annual basis or other schedule to help with unforeseen situations or to assist in upcoming college bills that may be on the horizon.

In summary, negotiating terms during the structuring of the settlement will give you more flexibility over time and allow you to plan for situations that may not be evident at the time. In any case, find the appropriate counsel who will look out for your best interests for the short and long term.

3 things to look for when setting up a Structured Settlement

Structured settlements can be generated from lottery winnings, litigation or insurance awards from workers compensation. In some cases you can inherit an annuity or monthly payments that provide an income stream for a period of time.

As with any type of arrangement, there are advantages and disadvantages of a setting up settlement depending on the goal of the individual and those around him. If you are in a situation where you need to make a decision on receiving a structured settlement, you may want to consider the following:

1. When setting up a structured settlement, it is recommended that you have a reliable attorney to assist in the planning and terms. It is important to select an unbiased party who so that your best interests are negotiated properly and you have all the information to make a justified decision before accepting the terms of the agreement.

2. When setting up an annuity, companies will pay large commissions to the person who referred the company. Ensure your attorney is not recommending a provider that may provide him or her with a fat commission, unless it is in your best interest.

3. Ensure the agreement you have with the insurance company that is offering the annuity does not charge you with high end fees and commissions. These fees can tap into your principle, leaving you with less money in the long run.

In summary, when you receive a structured settlement, ensure you are well versed in the setup and terms of the agreement. Utilizing an unbiased attorney who does not derive a referral fee from the insurance company will keep them honest and your best interests in mind at all times.

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