Post : Sell Structured Settlement For Cash
Title : Sell Structured Settlement For Cash
Sell Structured Settlement For Cash
Sell Structured Settlement For Cash
The financial debacle that has denied hundreds of former Executive Life of New York (ELNY) policyholders much of the income payments once promised them has shone a light on a corner of the industry little understood by many life insurance and financial service professionals: annuity-funded structured settlements.
Structure settlement payments can be scheduled any way each party desires. The payment, as an example, can be issued out annually over a set number of years or even periodic lump sum a few years at a time. Structured settlement payments also have an advantage of allowing a plaintiff to essentially reduce their tax-related obligations. In some cases, these payments are completely tax-free.
The inspiration for today's blog post has been a series of inquiries I've received from other planners over the past month, whose clients are being solicited to invest in structured settlement annuities, but have been understandably wary of the purported high fixed return with low risk” offering. After all, most returns that seem too good to be true” for their risk are in fact too good to be true, and entail higher risk than what is first apparent. Yet due to the unique way that structured settlement annuities work, the reality is that higher yields are not actually a high risk premium, but a low-risk low liquidity premium.
The right to structure a settlement must be negotiated during the settlement process and must be part of the documented settlement agreement. The funds to purchase the annuity must pass from the defendant or their agent to the annuity company or its agent. You cannot receive settlement funds first and then purchase a structured settlement annuity yourself after the fact. The annuity must, in fact, be purchased by the defendant or insurance company. During the weeks leading up to settlement, a claimant should make sure his or her lawyer is preserving the right to structure any part of the settlement.
The transferee - that is, the factoring company - is required to make a series of disclosures designed to highlight the value of transferred payments and to contrast that value with the net amount that a payee stands to receive in exchange for the transferred payments. In most states, the transferee is required to disclose the discounted present value of the transferred payments, as determined by using the Applicable Federal Rate” most recently published by the Internal Revenue Service for purposes of valuing annuities.
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