FAQ's of Structured Settlements

Structured Settlements

I hope that information like what is pasted below will help in your decision to sell your structured settlement. This is general information regarding structured settlement to help you make a much more definite decision. Do take the time to read as much about the sale of structured settlement so that you can get the best and most out of the sale of the structured settlement. The first question you might have: Should I sell my payments? The answer to that one is difficult. The question you might want to ask yourself is: Do I need the money now? For example: to buy a house for your family, money for your child's education, a business opportunity or to keep from filing bankruptcy in order to keep your home. 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. Using you structured settlement should be a last resort. What is it going to cost me?If you add up all your settlement payments and figured your settlement is worth that amount today, you might be disappointed with the amount the broker will offer you. Your structure came about because a certain amount of money was put into an annuity and then that principal, together with the interest is paid out over a period of time. (for example: $1,000. invested at 7.2% will double in 10 years, meaning if your payments adds up to $2,000. over 10 years only $1000.or an amount less than the $2000. was paid to buy that benefit.) So when you speak to a broker, it may look like you are only getting less than the sum of your payments. Simpler answer: the present value (today's value) that's the $1000. will be discounted to cover costs to do the deal and the rest is sent to you. I know it's confusing, It took me awhile to understand, when it was first explained to me. How long will it take to get my money?  You may have been told by others, 3 days,a week to 10 days. Not true - this is to get you to committed to them. Truth is - 2 months or longer - it depends on a number of things: a. The Insurance Company - (both issuer and owner of the annuity) - some companies are very difficult to deal with as you may have already experienced. b. MOST STATES NOW NEED COURT ORDERS. UPDATE: New law makes all structured settlement payment sales subject to a court order. If no court order, a tax equal to 40 percent will have to paid on the total amount of payments being sold. This is good, making selling your settlement sale safer. (For more information click here.)  c. Do you have monthly, quarterly, Semi or annual payment or are they lump sum payments?Different funders have different requirements and it is important for your broker to know those requirements. You will be able to obtain your money sooner with a lot less frustration if you have a knowledgeable broker. d. Is your Insurance Company an impaired rated company? - most funders sell off these cashflows or settlements much like mortgages to large Wall St. type financial companies and a couple of other insurance companies. They buy up these settlements in large blocks of a million dollars or more. These companies tend only to be interested in A+ rated ins. company backed annuities. So the Funder may have to hold the settlements of lower rated ins. companies or sell them off at a lower profit margin, therefore a lower price to you e. All the above applys to pricing plus having the necessary documention such as a copies of the following: The annuity, the settlement agreement and release, photo ID, recent check and application. see Settlements The above are a few of the considerations, there are more, but I think you get the idea.  How do I get the best deal? Not so easily. The best price today, can mean that when or if you sell off more payments in the future, you may find you didn't make such a good deal. Example: You could sell for the best price today, later in a year or so you may want to sell more payments, some funders will only honor their own address change, in which case, any other Funder buying additional payments will not be protected or guaranteed to receive those additional future payments. Call me or email me to explain that one, I know its hard to understand. Some funders will not buy the last payment.  How do I know if I'm dealing with a knowledgeable broker? There are brokers who say that they will shop for the best price and I'm sure they try to do that. The only problem is, "best price" isn't the only consideration. All things being equal Experience seems to prevail along with creativity, ingenuity and plain hardwork. Most brokers I have dealt with are honest; however most have little or no experience in this area of expertise. Graduates from those one week courses that point out that they are "certified" need at least one to two years of experience first. Few brokers do that many structured settlements or have the opportunity to gain the much-needed practice to convert annuities to lump sum payments. It took me a number of years to understand the process and I have 28 years background in the financial community. Questions to ask the broker: How long have you been in the structured settlement environment? What did you do before you came in the business? The broker should have some kind of a financial background, it's that difficult a business and getting more difficult every day. Trust your instinct, talk with the broker of your choice, get a sense that they are aware of the complexities. If it sounds too good to be true, you are right, meaning if they are offering a lot more money than other brokers, or can get the job done a lot sooner they may not be aware of the complexities that your settlement conversion may entail. You need to choose someone who is a good problem solver, as well as ethical.  There are few things that come easily, most of the time it takes a lot of diligent hardwork. I hope I haven't confused you more than when you started reading this.The important thing to remember is that with competent advice you can and will get the money you need. That is why I get such satisfaction out of this business.Over the years, I have received letters from clients telling me how I helped them to achieve some of their life's goals such as buying a new home, starting a successful business venture or getting out of a difficult situation. I hope we can share a positive experience in a similar way. There are good informed brokers out there. I suggest you take some time to explore all your options and select the right one for you. My goal is to help you get a fair price for your settlement, and to help you obtain your money in the shortest amount of time.