Annuity Lump Sum Payment
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An annuity lump sum payment is often sought by the annuity holder when the monthly payments that arrive are not enough to pay bills, make a large purchase or other desired action. An annuity may exist as the result of a personal insurance purchase especially made for retirement income or it may be the result of a tort judgment from a personal injury lawsuit or could be the winnings from a lottery. In any case, the desire of an annuity lump sum payment comes from someone who wants one large "cache of cash" rather than the trickle of monthly income. There are certainly providers ready and anxious to help the annuity holder to accomplish those wishes. Picking a provider may be one of the hardest tasks in this process.
Over the past ten years or so, commercials running on the large cable TV superstations have touted their lump sum services noisily and often. There are two main points these commercials make: This is my money, and I'd like to have it now, thank you very much. Often these commercials picture a person shaking his head in disgust over that monthly stipend that comes from the mailbox and then cuts to pictures of a new house, boat, car or other luxury item. The announcer then declares that those things can be a reality if only one will turn that annuity or structured settlement into cash now. An annuity lump sum payment appears to be the answer to life's great needs or wants. But there are surgeries that need to be performed, rooms that needed to be added on for Grandma's permanent stay, a "Hoopty" (clunker car) that cries out to be replaced and perhaps education that requires funding, so there are some very legitimate needs that require a provider's services.
If a person received an annuity or pension from a tort judgment, it was meant to provide long term income that could not be received because of personal injury. Typically, the insurance company of the defendant in a civil case is ordered to pay a lump sum of money to the injured plaintiff, sometime resulting in millions of dollars. But instead of hurting its bottom line, the insurance company will buy a pension for the judgment amount that will provide monthly income, often for a lifetime. But often the award is not nearly that much, and the monthly allowance check only amounts to a few hundred dollars albeit for perhaps thirty years, but seemingly not enough to make a lot of difference in the budget for many persons. Then the desire for an annuity lump sum payment begins to grow and action is usually taken.
Americans live in the most hedonistic country on earth, ever desiring the newest and the best and the shiniest and most gleaming. And so in some cases, that trickle of pension money coming in that could be invested quite nicely becomes almost a source of irritation because it's a reminder that this existing financial agreement doesn't provide nearly what an annuity lump sum payment could give in the way of acquiring shiny, new, chrome infested stuff. Some of the most insightful financial experts in the country suggest that a person seek some financial and personal counseling to hash out motives and reasons for being desirous of an annuity lump sum payment instead of accepting a steady trickle of income. Because of the potential of losing so much money in the sale of a structured settlement, such counsel and advice is clearly not out of the realm of reality. The troubles of life always make us want to get away from it all, but there is help. "Fearfulness and trembling are come upon me and horror hath overwhelmed me and I said, Oh that I had wings like a dove for then I would fly away and be at rest. Cast thy burden upon the Lord and he shall sustain thee: he shall never suffer the righteous to be moved." (Psalm 55:5-6;22)
The bottom line of acquiring an annuity lump sum payment from a buyer of structured settlements is a very big loss in the value of the structured settlement. The buyer must assume some very large risks including the possibility of annuity companies going belly-up. That does occur that at times, and if it happens the buyer is out of luck. But there is even a greater risk the buyer is taking, and that is the uncertainty of the future. An annuity is often stretched out over ten to thirty years or more. The buyer is taking a huge risk that everything will be as it is at the time of the purchase in financial terms. Inflation will be the same, the stock market will be the same, the value of the dollar will be steady and few if a recession will occur. Taking big risks mean taking big earnings, and the buyer of structured settlements will typically demand between forty and sixty percent of the value of the annuity.
The price of selling a structured settlement is enormous. And finding a buyer who is ethical and client oriented may be time consuming. There are a number of online companies ready to provide their services, but finding one that has the best interest of the seller may prove a daunting task. All buyers providing an annuity lump sum payment will ask for a large sum of the annuity's value so the difference will be in customer service. Make sure that references are checked as well as the company's record with the Better Business Bureau. Find out from the BBB how complaints against the company were handled.
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