Structured Settlement Money
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Structured settlement money is a phrase that buyers of the formal financial agreements throw around describing a financial agreement that is an annuity, real estate note or perhaps a lottery jackpot. With the changes that life often throws at us, individuals who have a structured settlement often need to trade in a monthly income check for a lump sum of money. While a lump sum can be used for anything, most often a medical, educational or real estate need prompts the holder to sell the income producer for a one time lump sum of cash. In the case of a personal injury lawsuit judgment, structured settlement money is provided by the insured's indemnity company in the form of an annuity that will provide monthly income, often for life. An annuity can also be purchased by an individual to provide monthly income for a set amount of years or the lifetime of the holder.
The injured party in a tort lawsuit that is won will often will sit in a room with his attorney and listen to the structured settlement experts from both sides offer an opinion on how much he or she will need to live out their lives or the next ten years without the income producing abilities once enjoyed. Arguments will be produced as well as forecasts about future medical expenses, including surgeries and therapy. In the ensuing weeks, an agreement will be hammered out regarding structured settlement money. In the end, rather than pay out a large lump sum to the plaintiff, the insurance company will buy an annuity that gives the injured individual monthly income, usually for life. And for the person closing in on retirement age, the choice may be to take money from an IRA and buy an annuity that will also provide monthly income for the rest of his or her life, or for a set amount of years taking away anxiety over market or economic conditions.
Structured settlement money may also be part of a lottery jackpot payout that was agreed to right after the winning numbers were announced. Payouts over a long period of time pay out much more than a lump sum agreement, and for the prudent individual often appear to be the best economic choice. Structured settlements provide true security, it takes away any temptation to quickly spend the money foolishly or thoughtlessly and it can also take away the big incentive for "sudden new friends or loving relatives" to hang around looking for a piece of the pie. Few walks of faith make authoritative claims, giving rise to the strong reactions that many people have regarding the very restrictive claims of Jesus Christ. But the Bible is very clear on this matter: "And this is the record, that God hath given to us eternal life and this life is in his Son. He that hath the Son hath life; and he that hath not the Son of God hath not life." (1 John 5:11-12)
A buyer of structured settlement money will also look at mortgage notes held by an owner. Suppose, as an example, that the owner of a house cannot find a high qualified buyer, so he works out a deal with a renter to lease the house out with an understanding it will all go toward the purchase of the house. But the day often arrives in the life of someone when larger issues loom and the monthly structured settlement money almost appears to be taunting the recipient of what could be if all the money were in his hands at one time. Perhaps there is a needed surgery or the desire to take an extended trip or the need for a new roof on the house that begins to make having all one's money in hand more desirable than having a small dole each month. When that day arrives, the owner of the structured settlement money agreement will begin looking for a buyer that can provide a lump sum payment. There are some quite common complaints about some of these providers, especially in the discussion of how long it takes to get one's lump sum payment. With this in mind, a person should do a lot of investigation to understand a buyer's track record and looking into the Better Business Bureau to uncover complaints about the company and also how those complaints were handled is advice encouraged to be taken.
When the buyer of structured settlement money has been found, there can often be what might be called reverse sticker shock experienced by the seller of the annuity, lottery winnings or mortgage note. It's the reverse of car sticker shock because of how little the seller will actually receive from the structured settlement sale. However, there are several reasons why a buyer will only give the seller between 40-60% of the full value of the settlement. Any structured settlement will have some long terms factors written into it and that immediately poses high risk for the buyer. A ten year annuity or mortgage notes have a long time to see inflation, deflation, world events, recessions and perhaps the failure of the annuity company or the renter to continue paying. The huge uncertainties of holding a structured settlement agreement in return for a lump sum of money brings the hard business person out in any buyer of this type. Make sure that you trust this buyer and be ready for the hard decision of taking such a great loss for the convenience of in hand money.
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