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Posts tagged Structured settlements
How to Get a Lump Sum from an Old Settlement
Nov 20th
The worst of the recession may be behind us but the economy continues to be volatile. In such trying times it’s not uncommon to be strapped for cash. Many people are not aware that it’s possible to get cash from structured settlements.
Structured settlements are those that generally come from an award won in a litigation case. Alternatively, it could also be in the form of cash from an annuity that will be paid to you in the future. However, the flip side is that structured settlements are normally paid in installments over a certain period of time.
So, if you were involved in a lawsuit, and ultimately received a settlement, the odds are that the settlement will not come to you as a lump sum payment but rather as monthly, quarterly or even annual payments.
An annuity is not really a settlement but rather a retirement benefit plan. During your working tenure, money is put into an annuity by you as well as your employer. Once you attain retirement age, you can make an application for annuity payments. Only then are you eligible to receive payments from the annuity. So, effectively you have to wait until retirement to avail of cash from an annuity.
But what happens if you need cash urgently? If you have won a lawsuit and the payouts are in the form of structured settlements, you can sell the rights to the settlement to a third party for a lump sum cash payment. This is known as cash for structured settlements.
Once you make a decision to sell your structured settlement, the need of the hour is to stumble upon a buyer who will give you the most reasonable price for it. There are funding companies who will be prepared to bail you out of your financial crisis by giving you a lump sum for your settlement. The problem is that they may rip you off in the process. There is no dearth of brokers who are willing to give lump sum cash payments for settlements. They take the settlements and turn them into money-spinning investments.
The main thing to take into account is that when a structured settlement is sold for a lump sum, the amount received is generally much lower than the market value and definitely less than what would be received through the periodic payments.
So, be cautious while planning to get lump sum cash payment from an old settlement. It may seem like a great idea at the time but you may regret it at leisure when you miss the comfort of a small albeit regular monthly payment.
Popularity: 7% [?]
How to Settle a Big Accident Claim
Nov 4th
In recent years, big accident claims are burgeoning. Insurance companies have to shell out large sums of money in such claims. Therefore, they are now trying to discover cheaper ways to settle these whopping claims.
Insurance companies have two main alternatives to settling big accident claims. One is through structured settlements where periodic installments are paid to the plaintiff and the other is through a lump sum cash payment. Structured settlements usually consist of cash upfront and the rest paid in installments spread over a number of years. Usually, this kind of agreement is offered to accident victims if the victim’s case is strong and the odds are in favor of the victim winning the lawsuit.
Claimants need to be sharp while handling these situations. If the settlement looks too good to be true, it probably is. More often than not settlements that seem appealing to the injured party are not all that favorable. Sometimes, the company may also attempt an out of court settlement if the defense attorney is of the opinion that the plaintiff’s case is strong.
Settling a case before a trial begins may sometimes be the best course to pursue. It is often advantageous to both: the defendant as well as the plaintiff. A structured settlement may benefit both parties at this point. On one hand, the defendant gets time on his side to pay the plaintiff in fixed periodical installments. On the other hand, the plaintiff gets the advantage of financial security over a period of time.
Once the case reaches a trial, the court also has a direct bearing on how a big accident claim is settled. A number of aspects are considered. The court may ask the defendant to create a trust for the victim. It may also instruct the defendant to purchase an annuity for the victim. In each case, the victim should be assured of receiving a stable periodic compensation.
But while agreeing to accept structured settlements, the claimants have to bear in mind that these settlements often do not take into account the time value of money. In short, this means that inflation will have no bearing on the settlement. So if you calculate the loss incurred over a number of years, the amount will be sizeable. Inflation is therefore an important factor to be given due weightage while deciding on structured settlements.
All said and done, the most prudent way to settle big accident claims should be worked out by the insurance company and should be feasible to both parties.
Popularity: 12% [?]
Why Structured Settlements are Better than Lump sum Payments
Oct 28th
It’s often been debated as to whether structured settlements are preferable to lump sum payments. Generally, the particular situation in question is considered while weighing the pros and cons. But by and large, the general view is that structured settlements are better than lump sum payments for a number of reasons.
In the case of accidents and injuries, people usually resort to lawsuits to try and recoup the damages sustained as a result of the accident. Structured settlements were not always an option. It is a concept that’s been around for only 20 years or so. Before that, if you won a lawsuit, the settlement was in the form of a lump sum cash payment. The idea behind the lump sum payment was that the victim could invest the money sensibly so as to obtain a decent amount for the rest of his life. Alas, this was not always the case. Thereafter, the concept of structured settlements came into existence wherein the award would be spread over a period of time and the plaintiff given money periodically (i.e. monthly, quarterly, yearly etc.) The manner of distribution of payments was decided and was called Structured Payment Annuity.
Structured payments give a sense of financial security to the plaintiff since he is assured of a fixed periodic income. This is the most suitable in case of kids. Children are not always in a position to comprehend the extent of damage caused and the repercussions of that damage. Getting a structured settlement in this case makes sense so that they get a fixed sum of money throughout their lifetime. Moreover, the award amount in some cases is massive especially where the damage to the child is grave, irrevocable and in some cases even permanent. In this case, to prevent misappropriation, sometimes structured payments are more beneficial.
Even if you get a structured settlement, and find yourself in dire straits financially, you have the option to sell of the settlement to a third party and get cash immediately. Moreover, you can choose to sell it either partially or completely. So, if you ever find yourself in a crunch, there are many companies who are willing to buy structured settlements from you in exchange for lump sum cash. Just be cautious and do your research to get the best deal.
Structured settlements are also a better option for insurance companies and others who have to bear the burden of a huge settlement award. They can reduce their burden by making staggered payments rather paying bulk cash upfront.
Popularity: 2% [?]
Structured Settlement- Your Options for Cash
Oct 25th
Structured settlements imply that after winning a lawsuit, the settlement is given to you in the form of periodic payments which can be monthly, quarterly or annually. However, you don’t have to get stuck with receiving a fixed sum of money periodically. There are many options for cash on structured settlements. You can either opt to receive the settlements in a staggered manner or you can get lump sum payments against your settlement.
It all depends on the situation and your financial status at a given point of time. Are you hard pressed for cash? Or, does the idea of receiving small fixed amounts appeal to you? If you are facing a financial crisis, a lump sum payment may tide you over the bad times. On the other hand, some people prefer the security of a pre-determined sum of money periodically.
Another option you have is to avail of a loan from a financial institution on the basis of your settlement. It may surprise you but many people aren’t aware that some institutions also offer loans on lawsuits even before the trial commences. They evaluate your case and if they feel that the grounds are justified and your case is rock-solid they may agree to advance cash against the settlement. But bear in mind, that all that glitters is not gold. So, be careful while availing of such cash advances as sometimes the interest rates charged are exorbitant.
Many people opt to sell their settlement after a few years to a third party in exchange for lump sum cash. Here also, you have the option to sell your settlement partially or completely. Again, you need to take into account the rate of discount charged. Most companies who agree to give you lump sum cash in exchange for partial or complete settlement rights charge very high discount rates.
Some people may also opt to get a lump sum payment not because they’re in the midst of a cash crunch but because they want to make profitable investments. While opting to get cash in return for settlements, don’t jump at the first offer but rather do a detailed market survey. Before settling on any one company, do a comparative analysis and ensure that the company you’ve selected is reliable and financially sound. The last thing you want is to get ripped off and end up in a worse position than before.
There are many options for getting cash on structured settlements. While selecting an option weigh the pros and cons and make an informed choice.
Popularity: 2% [?]
