Structured Settlement Quote
An accident victim may need a structured settlement quote from a funding company if they would like to swap the payment schedule for a lump sum amount. Structured settlements are insurance payments made to claimants as a result of damage, death, or injury from an accident. These payments may be in varying amounts or equal amounts over an agreed upon length of time. Many funding companies offer both quotes and calculators online for accident victims to use if they would like to cash in these structured settlements to get the full amount they are owed. There are many reasons to use these services, but not all situations merit the sale of a payment schedule.
A dump truck runs a red light and slams into a compact car. The injuries to the compact car driver are critical, but the driver recovers. The insurance company for the dump truck driver must pay compensation for the vehicle damages and the physical injuries. Since the injuries were so severe, the compact car driver will experience limited mobility for the rest of his life. The insurance company and the driver's attorney settle on a compensation amount. The insurance company is to pay out eight hundred thousand dollars in through a payment schedule. The driver chooses to begin the payments in five years when he had originally planned to retire. Yet, two years later, the driver's wife is diagnosed with a life-threatening illness. The medical bills are mounting. His compensation won't be paid for another three years. This is exactly the type of situation which requires a structured settlement calculator or quote.
A woman driving under the influence hits a family car. The parents die and the two children survive. The compensation from the insurance company falls into the millions, but the structured payments are spread out over many years. The first payment was used in full to pay medical bills. After a year, the children's guardians notice that the insurance company has been in the news a lot. The possibility of bankruptcy seems to be on the horizon. If they keep the agreement with the insurance company, it may no longer exist, and the money may be gone. This is yet another situation which may require a structured settlement quote.
The Bible says, "He that gathereth in summer is a wise son: but he that sleepeth in harvest is a son that causeth shame" (Proverbs 10:5). The compact car driver has two choices: wait for his payments and stand by helplessly as the medical bills continue to grow or use a structured settlement calculator and seek to cash in his compensation with a funding company to get the lump sum immediately. The second option seems to be the wiser. It will give him the freedom to pay those medical bills and seek more treatment for his wife. The orphans' guardians have two choices: wait and hope that the insurance company doesn't collapse or work with a funding company and get the lump sum up front with no risk of bankruptcy.
To get the ball rolling, either compensation recipient would need to contact several companies for their structured settlement quote. This is the lump sum amount that a funding company is offering for the structured settlement considering all of the factors involved. These factors include the total amount of the compensation, the number of payments, and the payment amounts among other details. It's wise to get several quotes from several different funding companies. The companies should be reputable with a long-standing history. Moving from an unstable insurance company to an unstable funding company would be redundant, so make sure that the funding company has a solid reputation for stability. The next step would be to seek the advice of an experienced attorney, perhaps the same attorney from the original settlement. Not all accident victims use an attorney during the settlement process. However, since so many legalities are involved in the sale process, it's necessary to have one working on the recipient's behalf.
Another helpful tool for settlement recipients is the structured settlement calculator. This tool will allow the recipient to calculate a possible lump sum amount. They are available online through some funding company websites. The information needed for the calculator includes the original lump sum, the current payment, how frequently it's paid, and how many payments remain. The calculator can then provide an estimated structured settlement quote. Although these are great tools, it's better to sit down with or call someone at a funding company regarding a quote. Many website will also provide quotes via email once the recipient submits all of the necessary information. In a short amount of time, it's easy to gather quotes from several companies to compare side by side.
Turning a payment schedule into a lump sum amount isn't for everyone. In fact, it could cost the settlement recipient thousands of dollars in lost funds. Seeking a structured settlement calculator or quote may not be wise if the recipient is looking to just invest the money. The return may not outweigh the overall loss. Purchasing cars and other items, investing in real estate or a risky business venture are all bad reasons to seek out a lump sum estimate. These services are only wise to use when the money is at serious risk of being lost or is needed in dire situations. Even if the insurance company stipulates that the recipient can't sell the structured settlement, there are ways around those agreement clauses. The funding company or the recipient's attorney can work with state laws to make the sale happen anyway. Carefully choosing the right funding company through structured settlement quote or calculator can make all the difference.
Structured SettlementA structured settlement is used when there is a large amount of money involved in the settlement of an insurance claim for physical injury or wrongful death, a workman's comp claim, or moneys awarded in a lawsuit following physical injury. Lottery winnings are also paid under the same kind of plan, and in all of these cases the purpose of paying the winnings or compensation as a structured settlement is to keep the receiver from having to worry about managing large sums of money all at once. In the case of an injury claim, the defendant pays the amount of the judgment to a third party, such as an insurance company, that puts the money into an annuity or U.S. Treasury bonds. Some of the money is usually paid up front to the claimant for immediate needs, and regular payments made after that. In the case of a lottery winner, instead of receiving payments monthly or annually, that person could choose to have it all invested to be withdrawn upon retirement.
In the case of personal injury cases, the plaintiff and defendant negotiate a settlement with the help of an expert who knows how to calculate the cost of medical care over time, and the needs of the plaintiff's family. The payments are calculated to meet those needs. The structured payment arrangements can be complicated, so the plaintiff should not agree to anything without consulting the attorney who has helped to win the case. Persons left with lifetime or temporary disabilities will have to be especially careful if they cannot work for months, or no longer work at all, to meet the family's needs. It would be a shame to end up with inadequate funds. Receivers of structured settlements have another plus in their favor--there are no taxes on these settlements, so they can count on being able to use all the funds awarded to them. It is in keeping with the Biblical admonition " To do justice and judgment is more acceptable to the LORD than sacrifice." (Proverbs 21:3)
Guardianship cases involving minors or persons declared incompetent are also suited for structured settlements. Guardians have a set amount coming in every month that is sufficient for meeting the needs of their charges, but not enough to waste any of the funds intended for their upkeep. In the case of a wrongful death claim, a structured settlement will provide a monthly income for the surviving spouse and children. If a surviving spouse is already working, they won't be as destitute as the family where the spouse who died was the only breadwinner, but there will still be a large hole in the family bank account without the other spouse's earnings. The purpose of any settlement at all is to pay compensation for a huge loss in a family.
The payments in structured settlements are fixed and determinable as to the amount and timing. The term for payout may be as long as 50 years in some instances, or for life. The payments cannot be deferred, increased, or decreased by the recipient. In fact, the recipient cannot have control over the structured settlement funds at all, once the terms have been determined. Attorney's fees may be paid as part of structured settlements as well, if the lawyer wants it set up that way. Payments can also be deferred for up to twenty years, if the attorney wishes that kind of arrangement.
Should the recipient in a structured agreement decide that a lump sum would be better, there are companies that will purchase the annuity from its holder, and pay the claimant what's left after its fees. If that course of action is decided upon, however, it should be done with considerable caution. The company offering to buy the funds should be carefully checked out through the Better Business Bureau and any referrals that can be found. Also, be sure of exactly what they are charging for fees up front. It would hardly be helpful to end up with serious losses, and some of the offers are nothing more than scams.
For the person who wins the lottery, a structured settlement is the ideal way to manage that kind of money. If the funds are deposited into an annuity, there is a choice of immediately beginning payments, or to defer them to a later date. Either way, the funds are always drawing interest, and the longer they are left alone, the more they grow. If they can be saved for retirement, for instance, and the winner will never have to worry about money again. Actually, with lottery winnings, either way the winner is fixed for life, but there is still the choice one could make. For lesser sums (than lottery), such as an amount awarded for bodily injury from which receivers will recover, the money in structured settlements could be deferred and used for college tuition for children or for the claimant's retirement--thus reaping benefits far into the future.