Structured Settlement Buyer
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A structured settlement buyer may be an answer for someone who has received lawsuit judgment award or annuity or some other financial long term payment, but needs money right away for pressing needs. Often, these needs are due to legal expenses or medical bills. Structured settlements, or long term payments as they might also be called can amount to a great deal in total, but be a mere pittance as it is doled out each month to the recipient. In spite of an annuity being large, say fifty thousand dollars, the small monthly payments may only be a few hundred dollars. For the recipient who cannot make it on his monthly income and seeks to pay down a mortgage or other outstanding debt to increase cash flow, a structured settlement buyer can come along and buy the annuity for perhaps forty cents on the dollar and give the annuity owner the money needed to increase his cash flow. The actual percentage of the buyout will be different from buyer to buyer.
To understand more fully how a structured settlement works, take the fictional case of a young man who is permanently disabled due to a faultily installed car part that broke, causing a horrific accident and ensuing injury. In the settlement decision, the auto dealer's liability insurance was ordered to pay one million dollars to the man after all legal expenses and non covered medical expenses were met. The insurance company did not want to put out a million dollars that would show up on its books as expense, so it purchased an annuity for one million dollars that would pay for $1666.00 of income monthly for fifty years. But the young man soon found out that despite this large overall settlement amount, the living expenses were going to be three thousand dollars a month. So the man immediately began looking for a structured settlement buyer to purchase the annuity for a lump sum payment.
The numbers were plain and simple for this injured man. The injured individual had to have three thousand dollars a month to pay for the care the man was going to need plus a place to live. In reality, someone that is disabled might want to have a special needs trust fund rather than a lump sum payment, and a conversation with financial planner would be in order, but this scenario is for explanation purposes. This man began searching for a structured settlement buyer and while the man saw some advertising on television across the country, everyone was on the Internet. "Who shall ascend into the hill of the Lord or who shall stand in his holy place? He who hath clean hands and a pure heart: who hath not lifted up his soul unto vanity, nor sworn deceitfully." (Psalm 24:3-4)
When the young man met with the buyer of choice, the injured individual and attorney had done a great deal of investigation. The reputation and the service provided by this structured settlement buyer were excellent so the discussion got down to the core of the issue. Of course one of the first questions out of the injured man's mouth was how much of the million dollars would he actually receive? The risk factors for the structured settlement buyer for this annuity were quite high, mainly due to the longevity of the payout. In fifty years' time, a number of things could occur including the going out of business of the life insurance company, inflation, the value of the dollar, world events and many other risks were mentioned in the discussion. As a result of this assessment of risks, the structured settlement buyer and firm offered the man a five hundred thousand dollar lump sum payment for his annuity.
At this point, the young man had a lot to think about. Fifty cents on the dollar was a bucket of ice water on the hoped for parade, but it was a fairly common figure for an offer made by a structured settlement buyer, especially given the very long term of the annuity life. One of the real human issues in all of this is the make-up of the young man himself. Annuity plans are structured in such a way to provide steady monthly income that would be missed because of the accident. The key word here is steady, but what if the young man might be tempted to take the lump sum and spend it rather quickly. That concern is of no interest to the settlement buyer unless the buyer has a higher calling than just making money.
Further discussion with his attorney led the young man to seek counseling with a financial planner as well as a minister. The financial planner suggested that only half of the annuity be turned into a lump sum, and the minister helped the man work through weaknesses he might have with possessing two hundred and fifty thousand dollars in a savings account. Holders of annuities are not the only ones who may consider the services of a structured settlement purchaser. Lottery winners, holders of mortgages or recipients of insurance settlements will all no doubt at least consider the use of a buyer. So choose wisely when considering a buyer of structured settlements by doing one's research and investigation before signing on the bottom line. Check the reputation and the service quality by asking for references and check with the Better Business Bureau to see how any complaints were handled by the buyer's firm.
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