Sell structured insurance settlement

Have you ever wondered whether you can sell structured insurance settlement for cash and not have to wait on the payments to come in slowly over time? The answer is generally yes, however it does require the approval by a judge in order to transfer the payments. The process of going in front of a judge is designed to protect the annuitants from making an uninformed decision. Annuitants who receive structured insurance settlements may have injuries that require an income for a lifetime as their ability to work has been removed or lessened greatly.  In some of the lawsuits, the case is  based upon a wrongful death or on behalf of a minor. A structured insurance settlement is designed to provide a predesignated amount of money on a monthly, yearly or as a lump sum for a period of time. Once the stream of income is setup and put in force, there is no ability to change the payout. Most of the time, the defendant will buy an annuity from an insurance or annuity company which will setup an annuity with periodic payments based upon the negotiated agreement. Unfortunately, with most things in life, our needs tend to change over time and in a large portion of the settlements, the annuitant is capable of returning to work. Therefore the annuitant may look at receiving some of the structured settlement money early to take care of other bills, buy a house, buy a car or many other reasons of need.

Around the early 80′s, structured insurance settlements started to become a vehicle for plaintiffs and defendants to settle a dispute. There are many reasons why a structured payout would be the choice of each party. First is the most obvious which is that the plaintiff needs an income because the nature of the accident has left the individual in a state of not being able to get a job in the future. The income from the annuity will help pay the bills. The second reason may be just from a  negotiation perspective. For example, the defendant didn’t want to pay what was demanded and the plaintiff didn’t want to concede to a smaller amount. The two may concede to a structured insurance settlement in order to settle the suit and avoid a lengthy legal process. What ever the reason for the annuitized payout, both the parties agreed with best intentions and belief that the annuity would be sufficient. What happens if life changes and the needs of the annuitant change also?

As an example, let’s say that Tom received a structured insurance settlement from a car accident when he was 18. Under an agreement that was negotiated, he received a structured settlement that provides him payments for the next 20 years guaranteed. Tom recovered fully from the accident over the next year and was happy to be receiving the monthly payments in exchange for the settlement of the case. Fast forward five years and Tom gets caught in the same economic crisis we all have seen. He is facing foreclosure on his house because the once steady job that he had went away due to downsizing. He knows that he can get another job eventually but is stuck in a situation of being homeless, destroying his credit and not taking care of his responsibility, which was to pay for this mortgage. Thankfully Tom has a choice to sell structured insurance settlement payments for a lump sum of cash that he can use to pay his mortgage and have money to cover his expenses for a period of time until he can get another job. Moreover, Tom doesn’t even have to sell all of his annuity now to get the money that he needs. An experienced and highly thoughtful person at a structured insurance settlement company who helps Tom through the process to sell structured insurance settlement, helped him design a plan to cover his mortgage and still have a portion of his monthly payments still coming to him.

As Tom quickly found out, the amount of money that the annuity adds up to over time is not the same as what he would receive today. Due to an accounting concept known as the time value of money, Tom learned that the payment he receives today is more complicated than just dividing the amount of money needed by the amount of money Tom receives each month. Time value of money is a concept in which a future dollar is worth less than a current dollar. Consider an annuity when it is purchased, it is purchased for a smaller amount of money than what it adds up to over time. Much like many of us put money into an IRA or other vehicle with hopes of receiving more money down the road. To sell structured insurance settlement is quite the opposite, the annuitants receives less today than what it adds up to over time.  Annuitants should also understand that there are legal and processing costs involved in these transactions. Since a judge must approve the transfer, it is necessary for a company to hire an attorney, pay court costs and in many cases admin fees to complete the transaction.