The Settlement Market

With all these settlements awarded to people, a market for settlements was formed from the need for people to turn future payments into current cash. Companies that deal specifically in assisting beneficiaries in converting their structured settlements are becoming more common. Still, the cost of redistribution of funds can be costly.

Those who have received (or are still receiving) regular payments are well aware of the unsolicited proposals from individuals and companies hoping to take advantage of mismanaged finances. The more unscrupulous companies have discounted the future annuity payments by as much as 40%, locking in a sizable risk-adjusted return. Due to this situation, about two-thirds of US states have enforced restrictions surrounding tax-free structured settlements.

Also, some insurance companies will not assign or transfer annuities to third parties in order to discourage the sale of structured settlements.

Some institutions will allow the partial sale of future payments. A majority of structured settlement sales are arranged in this manner, in which beneficiaries sell only the minimum portion of payments necessary to cover the most immediate of circumstances.


If you're considering selling all or a portion of a structured settlement, study the reputation of the company providing the payments. Don't get involved with a company that might become insolvent before paying out your buyout money. Also, consult with an attorney and a tax advisor before entering into any transactions. Approach potential buyers through a structured settlement broker who can compare and contrast differing offers for you and has the resources to provide legal and transaction guidance.

Take my money,

Phil

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Are Structured Settlements Right for You?

Part 3 of the Structured Settlement posts, this will briefly explain why a structured settlement would be good (or not) for you.

Structured settlements are a good way to solve your financial issues as a personal injury claimants or a beneficiary of a large money claim. Other than the tax benefits and security of receiving periodic payments, structured settlements are beneficial for people who don't want to deal with investing their proceeds or who don't have the knowledge to do it correctly.

Structured settlements may be right for people who:

• are temporarily or prematurely disabled
• have limited financial expertise
• are minors or unable to handle their own financial affairs
• require savings for housing, education or other large future obligations
• have been injured or have ongoing medical expenses

Take my money,

Phil