Archive for September, 2007
What you need to know before selling your structured settlement payments.
Frank Recouper asked:
What you need to know before selling your structured settlement payments. Before the state structured settlement protection statutes and the Victims of Terrorism Relief Act of 2001 which created ยง5891 of the Internal Revenue Code, any one wanting to sell their settlement payments were on their own. The sale of structured settlement payment rights today requires a Court in your state to review and, if appropriate, make a “qualified order” approving the sale of such payments or a hefty 40% excise tax is applied. The concept of Court approval is intended to protect you from entering into a deal that is not in your best interest.
Should I sell my payments? The answer to that one is difficult. The question you might ask yourself: Do I need the money now? For example: to buy a house, pay for an education, a business opportunity or to keep from filing bankruptcy. Any good reason would make sense. To go on vacation or buy an Acura Legend might not be in your best interest.
If you have other money sources to explore, I suggest using those options first. Selling your structured settlement should be a last resort.
Five things NOT to do when Selling your Structured Settlements.
One: Don’t sell to the highest bidder. Why? There is what is called High Balling. Some brokers or structured settlement or annuity sources will make a high offer just to get someone under contract. Then they will start making excuses and reduce the offer. Once you are under contract with a funding source, it is very difficult to back out. Even if you are able to pull out, you will have to start the whole process over again losing valuable time, at a time when you may need money desperately. Two: Believing the funding source when they say you will have your money in a couple of weeks. The time to close is dictated by individual state laws, both where the state and the insurance company have their home office and the state where the client resides. In some states, it is possible to close in about a month. In other states, it can take as long as four months. With the rest, it is somewhere in between. Court orders take time and all transactions need one. Don’t believe it if someone says they can close in a week or two.
Three: Thinking you have to sell the whole settlement or annuity. Not determining how much you really need. Why sell a $300,000 settlement when you only need $25,000? If you need additional cash sometime in the future you will be able to sell more payments or lump sums at that time. You will end up with more cash, than if you sell all payments at once; and it allows you options.
Four: Letting emotions or being desperate control our decisions. We have all gotten excited or felt desperate when faced with various situations. We could be excited about buying a home or starting a new career; or we could be feeling desperate because we are about to lose our home or are facing high medical expenses. Even though we are excited or desperate, we really must think through our decision. Some brokers or funding sources will try to take advantage of us and our situation. We should discuss our situation with a trusted family member, friend, attorney, pastor or whomever. We do not want to ruin tomorrows financial options by making irrational decisions today. Five: Check out the reputation of the structured settlement or annuity purchaser. Call the attorney general or consumer affairs in your residence state and the state where your funding source is located to see if there are any complaints about that funding source. If there are a lot of complaints against the source you are considering, take that as a red flag and move onto the next source. Don’t agree to anything or sign any agreements until you feel you are dealing with a reputable structured settlement or annuity purchaser. Remember to first look for other sources of money like family, banks and ect., before selling payments. If your settlement is your only source of income it is not in your best interest to sell. Make sure the people who are buying your payments have your interests in mind. SELLER BEWARE. I hope that you have a positive experience and put the money to good use, if you decide to sell your payments.
PurchaseStructuredSettlements-1st.info
What you need to know before selling your structured settlement payments. Before the state structured settlement protection statutes and the Victims of Terrorism Relief Act of 2001 which created ยง5891 of the Internal Revenue Code, any one wanting to sell their settlement payments were on their own. The sale of structured settlement payment rights today requires a Court in your state to review and, if appropriate, make a “qualified order” approving the sale of such payments or a hefty 40% excise tax is applied. The concept of Court approval is intended to protect you from entering into a deal that is not in your best interest.
Should I sell my payments? The answer to that one is difficult. The question you might ask yourself: Do I need the money now? For example: to buy a house, pay for an education, a business opportunity or to keep from filing bankruptcy. Any good reason would make sense. To go on vacation or buy an Acura Legend might not be in your best interest.
If you have other money sources to explore, I suggest using those options first. Selling your structured settlement should be a last resort.
Five things NOT to do when Selling your Structured Settlements.
One: Don’t sell to the highest bidder. Why? There is what is called High Balling. Some brokers or structured settlement or annuity sources will make a high offer just to get someone under contract. Then they will start making excuses and reduce the offer. Once you are under contract with a funding source, it is very difficult to back out. Even if you are able to pull out, you will have to start the whole process over again losing valuable time, at a time when you may need money desperately. Two: Believing the funding source when they say you will have your money in a couple of weeks. The time to close is dictated by individual state laws, both where the state and the insurance company have their home office and the state where the client resides. In some states, it is possible to close in about a month. In other states, it can take as long as four months. With the rest, it is somewhere in between. Court orders take time and all transactions need one. Don’t believe it if someone says they can close in a week or two.
Three: Thinking you have to sell the whole settlement or annuity. Not determining how much you really need. Why sell a $300,000 settlement when you only need $25,000? If you need additional cash sometime in the future you will be able to sell more payments or lump sums at that time. You will end up with more cash, than if you sell all payments at once; and it allows you options.
Four: Letting emotions or being desperate control our decisions. We have all gotten excited or felt desperate when faced with various situations. We could be excited about buying a home or starting a new career; or we could be feeling desperate because we are about to lose our home or are facing high medical expenses. Even though we are excited or desperate, we really must think through our decision. Some brokers or funding sources will try to take advantage of us and our situation. We should discuss our situation with a trusted family member, friend, attorney, pastor or whomever. We do not want to ruin tomorrows financial options by making irrational decisions today. Five: Check out the reputation of the structured settlement or annuity purchaser. Call the attorney general or consumer affairs in your residence state and the state where your funding source is located to see if there are any complaints about that funding source. If there are a lot of complaints against the source you are considering, take that as a red flag and move onto the next source. Don’t agree to anything or sign any agreements until you feel you are dealing with a reputable structured settlement or annuity purchaser. Remember to first look for other sources of money like family, banks and ect., before selling payments. If your settlement is your only source of income it is not in your best interest to sell. Make sure the people who are buying your payments have your interests in mind. SELLER BEWARE. I hope that you have a positive experience and put the money to good use, if you decide to sell your payments.
PurchaseStructuredSettlements-1st.info
Structured Settlements And The Power Of Annuities
Doug Smith asked:
A structured settlement is a type of financial settlement usually awarded to the victim of a personal injury accident. For example, assume a jury awards the victim damages in the sum of $4 million. Depending on the circumstances, the damages may be awarded as a structured settlement rather than as a lump sum.
The settlement is called “structured” because the initial award ($4,000,000 in this example) is divided up into equal payments that are paid to the victim at precisely defined time intervals.
If the settlement is structured to pay the victim $100,000 a year, the period of the settlement is 40 years. Therefore, the victim would receive a payment of $100,000 each year for the next 40 years. The total amount of cash received by the victim would be 40 years x $100,000 per year, which equals the original award amount of $4,000,000.
Many people think the paying party has to put $4 million into a bank account set up for the victim. They also think that $100,000 will be withdrawn from that bank account each year and paid to the victim. At the end of 40 years, the victim’s special account would be empty and the victim would have received the full amount of the award.
That’s one way of setting up a structured settlement. From the point of view of the paying party, there is a less costly financial tool for setting up a structured settlement. That tool is called an annuity.
An annuity is a large sum of money set up to pay the recipient a fixed amount of money at regularly-defined time intervals. But wait, you might say. That’s the same as putting $4 million in the bank account and paying it out over the 40-year period!
That’s almost true. The power of an annuity comes from the fact that it can be set up by depositing a much lesser amount into an interest-bearing or an interest-earning account.
Before continuing, you need to remember these important points. The court ordered the paying party to pay the victim $100,000 a year for 40 years. The paying party is not required to submit a lump sum of $4 million to be paid over the 40-year period. As long as the paying party pays the victim the specified amount at the specified time intervals, they are in full compliance with the law.
U.S. law specifies that annuities can only be set up by independent, neutral third-party insurance companies.
To set up the structured settlement, the paying party does have to have to submit a lump sum to the insurance company to be put into an interest earning account. But the power of annuities allows the paying party submit a lump sum that is much smaller than the total reward.
For example, if the structured settlement account consistently earns 5% interest per year, the paying party only needs to invest a one-time sum of $2,000,000. Each year, the $2 million would earn 5% interest. At the end of each year, the account total would be $2,100,000. The extra $100,000 would be paid to the victim, leaving the original $2 million in the account.
If the paying party can find an account that pays 10% interest, it would only have to invest a one-time sum of $1,000,000. At 10% annual interest, a sum of $1 million makes $100,000 per year, which would be paid to the victim.
At 15% interest, the paying party would have a one-time investment of $666,667 in order to pay the victim the required $100,000 per year.
As you can see, the more interest a structured settlement account earns, the smaller the sum the paying party has to invest in order to create the annual payments to the victim. The above examples use simple interest to avoid the complexities of real-world finance. However, the principle of the annuity works the same.
If it seems that the paying party is getting off easy, consider these points. First, the paying party is being deprived of a large chunk of money for 40 years. Second, they are complying with the terms of the structured settlement. And third, if your company was required to make these payments, wouldn’t you do it in the most economical way possible?
The resource below has more free information about how structured settlements work.
cash for annuity
A structured settlement is a type of financial settlement usually awarded to the victim of a personal injury accident. For example, assume a jury awards the victim damages in the sum of $4 million. Depending on the circumstances, the damages may be awarded as a structured settlement rather than as a lump sum.
The settlement is called “structured” because the initial award ($4,000,000 in this example) is divided up into equal payments that are paid to the victim at precisely defined time intervals.
If the settlement is structured to pay the victim $100,000 a year, the period of the settlement is 40 years. Therefore, the victim would receive a payment of $100,000 each year for the next 40 years. The total amount of cash received by the victim would be 40 years x $100,000 per year, which equals the original award amount of $4,000,000.
Many people think the paying party has to put $4 million into a bank account set up for the victim. They also think that $100,000 will be withdrawn from that bank account each year and paid to the victim. At the end of 40 years, the victim’s special account would be empty and the victim would have received the full amount of the award.
That’s one way of setting up a structured settlement. From the point of view of the paying party, there is a less costly financial tool for setting up a structured settlement. That tool is called an annuity.
An annuity is a large sum of money set up to pay the recipient a fixed amount of money at regularly-defined time intervals. But wait, you might say. That’s the same as putting $4 million in the bank account and paying it out over the 40-year period!
That’s almost true. The power of an annuity comes from the fact that it can be set up by depositing a much lesser amount into an interest-bearing or an interest-earning account.
Before continuing, you need to remember these important points. The court ordered the paying party to pay the victim $100,000 a year for 40 years. The paying party is not required to submit a lump sum of $4 million to be paid over the 40-year period. As long as the paying party pays the victim the specified amount at the specified time intervals, they are in full compliance with the law.
U.S. law specifies that annuities can only be set up by independent, neutral third-party insurance companies.
To set up the structured settlement, the paying party does have to have to submit a lump sum to the insurance company to be put into an interest earning account. But the power of annuities allows the paying party submit a lump sum that is much smaller than the total reward.
For example, if the structured settlement account consistently earns 5% interest per year, the paying party only needs to invest a one-time sum of $2,000,000. Each year, the $2 million would earn 5% interest. At the end of each year, the account total would be $2,100,000. The extra $100,000 would be paid to the victim, leaving the original $2 million in the account.
If the paying party can find an account that pays 10% interest, it would only have to invest a one-time sum of $1,000,000. At 10% annual interest, a sum of $1 million makes $100,000 per year, which would be paid to the victim.
At 15% interest, the paying party would have a one-time investment of $666,667 in order to pay the victim the required $100,000 per year.
As you can see, the more interest a structured settlement account earns, the smaller the sum the paying party has to invest in order to create the annual payments to the victim. The above examples use simple interest to avoid the complexities of real-world finance. However, the principle of the annuity works the same.
If it seems that the paying party is getting off easy, consider these points. First, the paying party is being deprived of a large chunk of money for 40 years. Second, they are complying with the terms of the structured settlement. And third, if your company was required to make these payments, wouldn’t you do it in the most economical way possible?
The resource below has more free information about how structured settlements work.
cash for annuity
Formula To Sell Annuity – Useful Information
Jennifer Walter asked:
Annuities represent a form of payment, in which there are two sides involved and in which the payee will get a certain sum of money each year until all the money will be received and the contract will expire. The agreements for the annuity are made by individuals, companies or government agency in order to safely dispose of retirement income.
Thus, the annuities are a form of investing your money in; you can pay for them on the spot or you can wait until the investment matures. The proceeds you will make are subject to taxation and to having interest rates ,either fixed or variable. Therefore, for those being on annuity plans and receiving money, the payments could be received in fixed premium shares or flexible premium shares.
In the current way, the payments come in different shapes and sizes, like the investment annuities, the structure settlements, the lottery payout or in the form of compensation for the workers. Like it was discussed earlier, you might need to wait a couple of years before you can receive payment and before the investment matures enough so that you can start earning money back.
Even so, there are numerous selling programs that offer attractive package and the agencies offering the plans ensure that the clients will not have to wait too much for the annuity payment to come. The payment can start to be received immediately, without having to wait for the customer to reach the retirement age. Some private companies even tackle in buying investments as well. They have been working in the industry long enough as to inspire confidence. Therefore, these companies are experts in allowing customers to receive payment and they can be trusty worthy enough so that it is worth you invest and securely place your money in.
When approaching such companies in order to provide you guidance and assistance in making your investment, it is a good idea to go to a company that is known for the strong relationships it has had with the customers and with the clientèle. Remember that the money you have toiled long enough and hard on it is in the game so you don’t want to be making any foolish things with your money. Also, remember that you might be obliged to cash the annuities out so be careful when you decide on dealing with the company.
Once you have initiated contact with the company, you need to wait for their response. This response time can vary because the company might not have an immediate answer for your request. By the time they will reply back, it might be too late for you to receive the first payment and therefore, you need to plan accordingly. Typically, a company that respects itself will send you the response quickly enough but cases might vary in circumstances.
Selling the annuities and making other transactions with them is not on everybody’s mind. The agent you will deal with is advised to have some things done before. Things like signing papers and having a check back to you in return are normal things on the agenda. Also, remember that you will need to ensure some legalities are done in that you might need to become involved in doing paperwork so that everything will run smoothly with your payment. Moreover, you need to be aware and fully grasp the significance of all the papers you are signing, because remember it is your money that you are playing with right now.
If you find that the agent you have chose does not do much to help you get things done, then you should quickly switch sides before more damage is done. If you dispose of some extra time, just go and do it yourself and then look for someone else, really reliable that you can count on when dealing with your affairs. Thus, you will be able to see how things are doing and thus, you will not be fooled when dealing with the money that you have earned.
Not being taken as granted for things will ensure that you have understanding of how things are going on.
cash for annuity
Annuities represent a form of payment, in which there are two sides involved and in which the payee will get a certain sum of money each year until all the money will be received and the contract will expire. The agreements for the annuity are made by individuals, companies or government agency in order to safely dispose of retirement income.
Thus, the annuities are a form of investing your money in; you can pay for them on the spot or you can wait until the investment matures. The proceeds you will make are subject to taxation and to having interest rates ,either fixed or variable. Therefore, for those being on annuity plans and receiving money, the payments could be received in fixed premium shares or flexible premium shares.
In the current way, the payments come in different shapes and sizes, like the investment annuities, the structure settlements, the lottery payout or in the form of compensation for the workers. Like it was discussed earlier, you might need to wait a couple of years before you can receive payment and before the investment matures enough so that you can start earning money back.
Even so, there are numerous selling programs that offer attractive package and the agencies offering the plans ensure that the clients will not have to wait too much for the annuity payment to come. The payment can start to be received immediately, without having to wait for the customer to reach the retirement age. Some private companies even tackle in buying investments as well. They have been working in the industry long enough as to inspire confidence. Therefore, these companies are experts in allowing customers to receive payment and they can be trusty worthy enough so that it is worth you invest and securely place your money in.
When approaching such companies in order to provide you guidance and assistance in making your investment, it is a good idea to go to a company that is known for the strong relationships it has had with the customers and with the clientèle. Remember that the money you have toiled long enough and hard on it is in the game so you don’t want to be making any foolish things with your money. Also, remember that you might be obliged to cash the annuities out so be careful when you decide on dealing with the company.
Once you have initiated contact with the company, you need to wait for their response. This response time can vary because the company might not have an immediate answer for your request. By the time they will reply back, it might be too late for you to receive the first payment and therefore, you need to plan accordingly. Typically, a company that respects itself will send you the response quickly enough but cases might vary in circumstances.
Selling the annuities and making other transactions with them is not on everybody’s mind. The agent you will deal with is advised to have some things done before. Things like signing papers and having a check back to you in return are normal things on the agenda. Also, remember that you will need to ensure some legalities are done in that you might need to become involved in doing paperwork so that everything will run smoothly with your payment. Moreover, you need to be aware and fully grasp the significance of all the papers you are signing, because remember it is your money that you are playing with right now.
If you find that the agent you have chose does not do much to help you get things done, then you should quickly switch sides before more damage is done. If you dispose of some extra time, just go and do it yourself and then look for someone else, really reliable that you can count on when dealing with your affairs. Thus, you will be able to see how things are doing and thus, you will not be fooled when dealing with the money that you have earned.
Not being taken as granted for things will ensure that you have understanding of how things are going on.
cash for annuity