The site is designed to educate
and answer any questions you may have. If you cannot find the answers
you are seeking go to our Ask the Expert section and we will provide the
information.
Structured Settlements – What are they?
It is a financial award given to someone that sustained
injuries in an accident typically paid by an insurance company. Rather
than one large payment and structured settlement is an annuity that pays
the recipient out over time. The purpose is to provide ongoing income
for someone that may not be able to work so that they can meet their
financial obligations over the many years. Payments are often paid
monthly or quarterly and can last up to twenty, thirty years or more
depending on the case and situation.
Why Settlement Recipients Sell?
The most common reasons people transfer their future payments for cash include:
1. Their life or financial circumstances have changed
2. To pay mounting bills
3. Other reasons include: divorce, to pay for college, or a down payment on a house
Additional Information
A structured settlement can offer several advantages
including the security of long-term income being guaranteed. If the
injured party is unable to work due to their injuries this provides them
income to pay their bills and get any need medical care. It also
serves as a way for one to manage their settlement and ensure they will
have money to meet their ongoing needs several years in the future. It
also enables the injured party to focus on their recover rather than
money management.
There are statistics that show that up to 30% of those that
receive a lump-sum as their settlement spend it within the first few
months and upwards of 80% have spend the money within five years.
If one chooses an lump sum payout from the onset the money
needs to be invested and administered. Unless the injured party or
their family has money management experience they will need to hire a
quality financial advisor to invest the award to ensure it will last for
many years to come.
The income from a structured settlement is tax free, both at
the Federal and state levels. Because the money is handed out in
smaller increments there is less need to for a financial advisor as the
payments are set up to meet your monthly needs.
Structured settlements are often ideal under the following circumstances:
- Workers compensation cases where the
injured party is unable to work for a protracted length of time. A
structure will allow steady income to insure that the victim and their
family will continue to have steady income.
- Disabilities of a temporary or permanent nature that require extensive health care or recovery time.
- Guardianship cases where the injury
results in death of someone with minor children. A structured settlement
can insure that funds are available for the surviving family members.
There are many things to consider if you are in a position
to receive a large amount of compensation for injury or accident. One of
the options may involve payments over time. Before you act, you should
learn as much as you can about structures in order to determine if such
an agreement is right for you. As always, should you find yourself in
such a situation, you should consult with a financial advisor and/or a
competent attorney. The last thing you want to do is deal with a crisis
without adequate help.
If you have a structured settlement and are considering
selling, read on to learn more or contact us via our “ask the experts”
page or call us for personalized assistance.
Settlement Definitions
It will be helpful while navigating this website and
learning more about settlements to know the most important terminology
used in the industry. Some of the more important definitions are below.
If this site does not answer you questions or if you want a definition
explained to you please email us at
info@structuredsettlementhelp.com We are happy to answer your questions and put you on the right path for whatever your particular issue is.
Factoring Company – This is a company that purchases future payment or annuity streams and provides the seller lump sum cash.
Structured Settlement – Financial settlement for
someone injured in an accident – rather than being paid out in cash they
receive a settlement that is structured to make recurring payments over
many years to help the recipient meet their long term financial
obligations.
Annuity – A settlement is set up by purchasing an
annuity that will then make payments to the recipient over the term of
the agreement. The annuity is purchased by the insurance company that
presented the offer of a settlement is managed by a second
(non-affiliated) insurance company. Payments are made at regular
intervals typical monthly, quarterly or annual as stipulated in the
original terms of the agreement.
Primary Market – The primary market are companies
that help injured parties to set up a structure based on the offer of
the settlement by the insurance company. The goal is to take the full
amount and space out payments in such a way to meet monthly financial
obligations over a long period of time (ten, twenty years or more).
Secondary Market – These are factoring companies (see
above) that help those that have a settlement and want to cash in their
payments for cash. They are the buyers.
FAQ’s
This website will set up a Frequently Asked Questions
section but some of the more important questions are below. If you have
a question that is not answered here or on the site please submit your
information on our form above or the you can email us as well and we
will answer you question promptly.
Can I sell my settlement – The short answer is yes.
Based on the definitions above there is an entire industry that was set
up to meet the needs of those that are receiving payments from an
annuity and want/need a larger sum of cash. You can cash out your
payments.
Do I have to sell all my payments: No – the good news
is you have flexibility to meet your needs based on your wants and
financial situation. You have the option to sell all your payments at
one time or sell only some payments. If you sell on some payments you
can get a lump sum today and keep some of your future payments intact.
The amount of payments you sell is totally up to you but should be
considered carefully so you cash in the right amount.
Can I do more than one cash out transaction: Yes, it
is certainly possible and done fairly routinely. Although this is often
done by those that mistakenly do one cash out transaction and sell too
few payments. So it is important to consider the amount of cash you
need today and any future need you might have so you can try to do only
one transaction. But the option to do a second or third transaction is
possible.