If you are reading this article then the chances are that you are the recipient of structured settlement annuity. However, it is understandable that periodical payments may not be sufficient for you and you are looking to sell structured settlement annuity in order to get a lump sum.
You will be allowed to sell structured settlement annuity only when a court approves of it. Hence you will need to convince the judge that you actually have an emergency or a financial crisis that is making you sell. This might not be so easy because what is urgent for you may not be perceived the same way by the judge. Therefore, you will need a good lawyer to help you.
When you decide to sell structured settlement annuity you must make sure that you get the best price. This is because the people who are going to buy are also looking out for maximum profit and the greater your need and urgency the chances of you being taken advantage of also becomes great. Hence, the first rule to get the best price is not let the other party know how urgently you need the cash. The trick is to stay calm and negotiate as if you have all the time in the world. This is one of the best negotiating skills.
However, before you reach the stage of negotiation, you must ask your friends and family for a recommendation. If they have bens satisfied with a company then it is advisable for you too to approach them.
Do some research online about the recommended companies and a few more too. Reading revises and testimonials abut these companies is also a good idea. All you need to do is Google review and the company name. This will make you more confident when you finally meet their representatives. Now, this may sound like childish advice but then you will be surprised how many people just jump into negotiation blindly with just any company.
There are many companies in the industry that are fair and ready to give you the best price but you need to know which. Make a list of the top 5 companies that you may sell structured settlement annuity to and call them to give you quotes. The comparison of quotes will make you make the best decision.
Be ready to hear about a lot of offers form these companies because they will surely try their best to persuade you to decide fast. Do not be trapped into sales gimmick and don’t rush to sell structured settlement annuity. Take some time to think about these offers. Consult with knowledgeable and experienced friends or family members who will help you calculate the pros and cons of each offer. It is all right to sit with these offers for a few days before giving a final answer. Be firm with the buying companies and tell them that you need time to think. Your needs may be urgent but thinking out the various options will help you get the best deal that will go a long way in helping you out with your current problem.
You are likely to become a recipient of a structured settlement if you win a lawsuit for any injury or sickness inflicted upon you by another person intentionally or account of negligence. These damages are paid on a periodical basis. Now, often people are attracted by the fact that they can receive the entire amount immediately if they were to sell structured settlement. It is very important that you weigh the pros and cons of this decision before actually going for it.
Structured settlement companies today have become a very popular way of paying for damages. For one, it makes it easy for the defendant to pay gradually and thus lightens his or her burden. Second, the claimant is also assured of a fixed regular income. The assurance exists because the defendant does not pay the claimant directly; instead the payments are routed through an insurance company with whom the defendant buys an annuity.
Now as tempting as it may be to sell structured settlement and cash in on the entire compensation in one go, you must remember that ultimately you are losing out on some of the money. This happens because structured payments are tax free but when you take an entire lump sum you become eligible for certain taxes. Secondly, the companies that will buy your structured settlement are doing so to make a profit; hence it is obvious that they will buy at a discounted price. This will result in significant reduction in your total compensation.
However, there are situations in which structured settlement companies can be a hindrance. For example, if the claimant has a lot of pending medical bills or is facing a financial crisis etc. then the large amount may provide a permanent solution. The claimant’s business may need some financial boost which can be beneficial in the long run. If there is a debt that can absolutely paid form the settlement amount then it makes sense to take a lump sum. In cases where the debt will only be partially paid then it makes more sense to invest the periodical payments such that the return on the investments can be utilized for paying the debt.
If you are very confused with your decision then you can contact the National Foundation for Credit Counseling that will advise you on how to handle your situation and whether your decision to sell structured settlement is wise or not.
If the claimant has no immediate need for the large amount, then he or she stands to benefit more in the long run by opting for periodical payments instead of deciding to sell structured settlement. Some settlements will have provision of paying to kin in the event of claimant’s death but if such a clause does not exist in your agreement and you are worried about your family’s financial future; then you can opt to sell structured settlement and make a sound investment in their name.
If there is no financial emergency then it is prudent to opt for structured settlement companies. Human beings have a tendency to spend more if they get more; so if you don’t opt to sell then your money will be safe and keep coming to on a regular basis.
There are plenty of people like you who have heard about structured settlements only due to the amount of commercials being aired on TV. These commercials tell you to sell structured settlements to cash in immediately. What are structured settlements anyway?
Basically structured settlements are nothing but periodic payments as a result of a lawsuit verdict. The claimant is usually a person who was injured or became sick due to the defendant’s fault which can be negligence or an intentional act. Such payments are usually made on a monthly, quarterly basis. Some also prefer a semi-annual or annual mode. The defendant however does not pay the amount to the claimant directly. Instead, the money is paid to a life insurance company’s subsidiary that is known as its assignment company. The assignment company then buys the annuity from its parent company and pays the claimant on a periodical basis in the predetermined mode of monthly, quarterly, semi-annually or annual.
There are people who sell structured settlements to receive a lump sum payment. The option to sell structured settlements does not lie with the claimant. At times the claimant may be in dire financial conditions and need a large amount to bail him or her out. In these situations the lump sum payment is a big help. It may be noted that if a person were to sell structured settlement for upfront payment then he or she may be liable to pay certain taxes unlike the tax benefits or savings in periodical payments. You may be wondering who these people are to whom the victims or claimants sell structured settlements. The structures are bought at a discount by factoring companies. There are some states that may require a hearing before you are allowed to sell structured settlements.
On the other hand there are some who would rather not sell structured settlements and prefer regular payments. These safeguards against a person’s tendency to spend the whole money in one go and then regret later. There is a lot of flexibility in the way you decide to receive these settlement amounts. You can even ask for a predetermined amount upfront and let the remaining be paid to you as periodic payments. This is an alternative for people who want to sell structured settlement for a large amount of money. They can just ask for the amount that they may need immediately and let the defendant pay the rest monthly or in any other mode as the claimant prefers.
It is prudent to go through the settlement agreement and review the structure. If there is more than one claimant for the same lawsuit, you should check to see whether and how your agreement is different so that you are not at a loss, you should also check to see if there is a provision for adjustment against inflation etc.
It is very important to weigh the pros and cons while deciding to sell structured settlement. The claimant should analyze his or her needs before opting for selling. It must be noted that the buyers will profit when they buy your structured settlements; this means that there will be a reduction in the amount that you actually get. Hence it is advisable to sell only when the immediate needs are far greater than the loss you will incur. If you are unsure of what to do then the only wise thing to do is consult a lawyer before venturing out to sign any agreement with a buying company. The lawyer will explain clearly what your risks and losses are so that you can make the right decision. Generally people opt to sell structured settlement when there is an immediate financial emergency such as medical bills, payment for a new vehicle or building a house, etc.
There are tremendous benefits of structured settlements in addition to tax savings. These payments provide a financial stability as the periodic payments are assured. This assurance is much needed in times when the claimant is undergoing not only a financial crisis due to the accident but also may be a victim of emotional trauma. Thus the structured payments protect the victim financially so that he or she can utilize the time to get back to his or her feet in all aspects.
Structured payments provide a big advantage to the defendant too in case of a lawsuit. It lightens the burden of the defendant by not having to pay the claim in one go. Such settlements have become popular since the mid-1970s when the Internal Revenue Code allowed the defendants the facility to purchase annuities for funding their claim payments.