Structured settlements are a type of financial agreement where a person receives small payments over time by selling structured settlements until a certain amount has been reached. Usually, such arrangement happens when insurance companies settle claims or perhaps even in civil cases where paying a lump sum by the practice of purchasing structured settlements would cause the losing party some financial hardship and prevent them from paying any amount to the winning party. These settlements are usually very detailed and exact and both parties have to agree to it. Many judges and courts simply think that a structured settlement in a better alternative to straight lump sum payments. Many insurance companies prefer this also because it helps to manage their cash flow while making sure everyone gets covered.
How to Buy Structured
Believe it or not, anyone can buy structured settlements from other people. Some people who receive such payments would be willing to hand over the payment to another party in order to get a lump sum, minus a fee or percentage. The buyer gets a guaranteed regular payment of cash with some interest percentage while the seller gets a lump sum of cash he or she may need or want.
There are a few steps you need to follow in order to buy structured settlements:
1) Review offers:
There are some companies that broker such deals and they will give you several offers that might meet the criteria of what you are searching for. Ask the brokering company what their terms are and if they take verbal offers. That way, once you find an offer, you can reserve it.
2) Fill up paperwork:
The next step involves filing formal paperwork, usually a purchases information worksheet and in many places you have to follow state and of course, federal laws on how to make a formal offer to buy structured settlements.
3) Sign the purchase agreement:
Once the broker receives your purchase info worksheet, they will send you a purchase agreement that you must sign and return to them. The agreement usually lays out the terms of the relationships, the transaction process, and the terms for how the fund will be handled.
4) Transfer of funds:
Once the account is ready, you have to agree to the transfer of the funds. You have to sign documents and forms to get this ready. Then you usually have to surrender a deposit and then wait 30 to 90 days for closing.
5) Wait for court date and approval date:
The process of buying a structured settlement has to go through a court. The broker will inform you of these dates, plus when the originating party acknowledges the sale.
6) Pay the balance:
You must pay the remaining balance of the full amount 15 days before the court date.
Finally, the closing process can take place. The court agrees and approves that changes to the structured settlement agreement. The seller receives the money and you get the necessary paperwork to prove that the payments should now go to you.
Now, if you want to sell your structured settlement, there are a few things you should know. There are many companies and individuals looking to buy settlement agreements and it’s hard to choose which one is the best. Make sure you are going through a reputable broker or company, even if the buyer approaches you by yourself. Here are a few things you should look for:
- Courteous and helpful customer service
- Good or fair payout and accurate offer
- A thorough explanation of timeline
- Knowledge of pertinent laws and regulations
- Good reputation
- Gives good recommendations for consultations with other experts.
Why Buy Structured Settlement Annuities?
Now, some people want to know what the benefits are exactly when you buy structured settlements. Well, there are several. First, you can get higher percentage yields than you would with savings accounts and even some mutual funds. Another good reason is that you can count on the fixed payments as a form of income. That means even if you lose your job, you can still count on money coming in. The source of the money, usually an insurance company, has to be vetted in some way. They must be regulated by the state and most of the companies have an S & P rating no lower than A-. Some people also like the fact that they have complete control over the process. They get the settlement payments directly from a reliable source and the broker doesn’t hold the money at any time. Of course, the best reasons to hold any type of investment is to increase your personal wealth. Almost anyone can use and buy structured settlements, from regular employees to trusts and foundations and even group investors. And when you increase your own personal wealth, you can use the money to fund your retirement, your dreams, and live comfortably no matter what life holds for you.