A quick guide about Structured Settlements
A structured settlement is a contract under which an insurance company undertakes to make periodic payments to an injured party as part of a bodily injury claim settlement or to a surviving family member to whom a large settlement has been awarded. These are simply two examples where this would come into play. These products have become well loved because they offer substantial benefits to all parties involved in the settlement agreement.
A brief review of the dictionary reveals the following definition: a structured settlement is simply a financial package that permits a settlement to be paid in regular payment installments for either a set period of time or over a lifetime. It is a package that is tailor made for the individual or payee by the payer or an interested third-party. There are some settlements that will make an immediate payment if certain things were to occur.
Plus points of a structured settlement.
One huge benefit of a this product is that the payments are completely tax free. Most investment options such as stocks and bonds, real estate, savings accounts, and similar vehicles simply cannot match the flexibility and security of it Annuity.
Another benefit of a structured settlement annuity is that it can be designed so that payments are made over an extended period of time, even throughout the life of the payee. If the recipient passes away during the course of the payments then part of the settlement may be paid to a chosen beneficiary or the person’s estate.
Other choices to structured settlements.
As you can see, there are a lot of advantages for everybody concerned in a structured settlement. However, there are many people who would prefer to receive their payment in one lump sum as opposed to instalments. They may prefer this so that they can make big purchases.
For lottery winners this is an incredibly popular option. There are numerous companies out there who will provide this service. When the lump sum is paid there are deductions for expenses and interest. Those going through this process would be wise to remember that these fees are going to be taken.
How do the alternatives work?
A lump sum is paid after the settlement is sold to a financial institution who takes the instalments. Commonly, the financial institution involved will be another major insurance company.
There will be handling fees deducted. Also keep in mind that nothing in the financial world is free.
It is vitally important that you read through all terms and conditions carefully. Asking questions is a very good idea during this process. Finally, it is important to shop around because structured settlement fees will be extremely varied.
If you are interested in selling structured settlement you can get information and advice from Symphony Investments.
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