Purchasing Structured Settlements Blog: What You Need To Know About Structured Settlements

Purchasing Structured Settlements Blog: What You Need To Know About Structured Settlements

There is a lot of information that you can glean from a purchasing structured settlements blog. The first thing that you are going to find upon visiting a purchasing structured settlements blog is that there is a lot of information to take in pertaining to structured settlements. If you want to understand what it means to buy and sell structured settlements, then some of the information that you are likely to find online will include:
* When a structured settlement company buys a structured settlement, they typically do so at a profit. The lump sum amount that an individual receives when selling a part of their settlement or their complete settlement is not going to be the same as the actual value for the structured settlement that they are selling. In other words, the individual who is selling the structured settlement is going to lose a little bit of money on the process, and the company doing the buying is going to give itself a potential for profit.
* The money that these companies earn is then invested into the best possible option within their investment portfolios during that time, and these profits are used to pay employees, to keep the company running and to advertise the business. A structured settlement company that is financially healthy is going to be a much safer opportunity for individuals doing the selling since there is a much smaller chance for the company to go bankrupt.
* Companies tend to be attracted to structured settlements because this guarantees them a safe amount of cash flow, and because these purchase transactions are not generally taxable. There are always generally going to be individuals that need money quickly who are willing to swap their structured settlement in order to get some money quickly. The work that is involved in the purchase of a structured settlement is not generally very much at all, so the main part of the effort has to do with marketing the business and then obtaining the court approval for the purchase in a way that is compliant with federal and state laws.
* Because of the fact that structured settlements are guaranteed results in the structured settlement purchasing companies being able to obtain debt with low interest rates so that they can then use that debt to finance other types of ventures. For example, a structured settlement debt can pay a lump sum of $200,000 with a pre-tax ROI of 10 percent over a 20 year period, and this will return a total of $23,492 every single year, which is a greater profit than what they shelled out upon buying the debt.
There is plenty of information available online through the various types of purchasing structured settlements blogs out there. If you are serious about finding out more information about structured settlements, then one of your first stops is likely going to be a purchasing structured settlements blog. It is vitally important that you have a firm understanding of what structured settlements are, and what it means to buy or sell them. If you have a structured settlement and you want to trade it in for quick cash, or if you are interested in buying structured settlements as a business, then the more that you know and research, the better off you are going to be. Knowledge is power, and when it comes to business investments and money, you really do need to have as much knowledge on your side as you possibly can. Structured settlements can be really beneficial, but only if you know how to do the right things with them over the long term.

Structured Settlements Utilize Annuities

Structured Settlements Utilize Annuities

To fund the financial obligations owed to an injured party, a defendant – or more usually, his or her casualty insurance carrier – will purchase one or more annuities from a life insurance company, or delegate its periodic payment obligations to a third party, which in turn would purchase a qualified funding asset – either an annuity or a government bond.
The payments are then structured, or scheduled. An insurance company agrees to pay the injured individual a predetermined amount of cash for a fixed length of time or for the duration of the life of the claimant, depending upon the particulars of the settlement agreement.
Structured settlements are governed by both federal and state laws and must be closed under court order. The process is highly regulated by the courts. Some states also require the hiring of an attorney as a precondition to acquiring a structured settlement annuity.

Annuities and Structured Settlements

Annuities and Structured Settlements

An annuity is a contract between a consumer and an insurance company that provides for the repayment of a premium back to its buyer over time. An annuity is a hybrid financial arrangement with characteristics of both an investment and an insurance policy. On the one hand, there is an expectation that the money used to purchase the annuity, which is invested by the insurance company on behalf of its owner, will provide a return that exceeds the original outlay. On the other, it comes with an assurance that there will be a fixed rate or time period of return and sometimes a guarantee against loss of principal.
The concept of annuities dates back to ancient Rome, but the first record of annuities in America comes from the Colonial period. In 1759, a company formed to provide a secure retirement for aging Presbyterian ministers and their families. In 1812, the Pennsylvania Company for Insurance on Lives and Granting Annuities received a charter to sell annuities to the general public.
The current era of annuities began in 1952 when the educators’ retirement fund, TIAA-CREF, first offered a group variable deferred annuity. Annuities today are mostly used as a way to provide for an individual’s retirement, usually on a tax-deferred basis. Americans now own over $1.7 trillion in annuity products.
Structured settlements are linked to annuities because they’re considered an effective way to deliver money to people who need it but also need the disciplined of a monthly or yearly payout. Congress in 1982 passed the Periodic Payment Settlement Tax Act, which established structured settlements as a way to provide long-term financial security to accident victims and their families.
The idea was to replace lump-sum payments awarded to personal injury claimants with periodic payments. The government’s aim was to decrease the number of personal injury award recipients who went through their funds too quickly and were subsequently forced to rely on public assistance. In addition to personal-injury claimants, structured settlements are frequently set up for winners of tobacco lawsuits, for lottery winners and for lawyers and law firms who are owed large sums in fees.
Because annuities can be designed to offer timed payouts, guarantees on principal, as well as investment gains, and were already being offered by insurance companies, they quickly became the preferred vehicle in which to implement structured settlements. To encourage their use, the new law made any interest or capital gains earned on the annuity within a structured settlement tax free.

Buying structured settlement income streams, legal issues and risks raised by SEC bulletin

Buying structured settlement income streams, legal issues and risks raised by SEC bulletin

In part three of our series examine the SEC and FINRA bulletin regarding structured income streams and investor risks, we are joined again by Attorney Matt Bracy of the law firm, Nesbitt, Vassar and McCown of Dallas, TX.

While much of the SEC alert discussed the issue of factoring, or selling a clients periodic payments/structured settlement income stream, the second issue was the risk to investors in these programs. The marketing of secondary income programs, backed up by structured settlement annuity income streams, is a recent phenomenon in the financial marketplace and obviously has drawn some scrutiny from regulators as to the risks for investors who are interested in purchasing the above market yields they offer.

Matt Bracy outlines the four key elements that investors in settlement income streams needs to be aware of before agreeing to purchase a program, as well as some of the transaction risk that needs to be considered. The video outlines these in detail but topics such as examining the legal order, making sure it complies with state and federal laws governing income transfers, questions about who is actually mailing you the check each month and the financial security of the original annuity issuer are all covered in this important conversation.