Structured Settlement Annuity FAQs

annuityIf you’ve been injured and another party is at fault, you may rightly decide to take legal action. Both parties may then decide on a structured settlement agreement, rather than a lump sum payout. These agreements can be complex and confusing, and if you decide to sell your structured settlement annuity, you may be overwhelmed with your options or not know the correct steps to take. Here are some common questions about structured settlements and annuities to help get you started:

  • What are structured settlement annuities?
    There are many types of annuities, which refer to insurance contracts that will provide payments over time instead of all at once. With a structured settlement annuity, an injured person receives regular payments over a long period of time. The length and payout periods for annuities can vary, but two of the most common are those that pay out over the course of 25 years, and those last until the person’s death.
  • What are some benefits of structured settlement annuities?
    One pro is that these agreements are tax-free. Another is that they can provide income for life for the recipients, while helping them manage their money responsibly.
  • What are some negatives of these agreements?
    One drawback is that the recipient never actually owns the agreement; that right belongs to the insurance company who provides payment. If the insurance company funding the agreement goes bankrupt, then the injured party may never receive the money they were promised. Another downside is that, while the purpose of an annuity is to cover a person’s income for their lifetime, depending on the settlement terms, the monthly payments may not make enough of a difference to improve that person’s life. This is often the case if that person is in a significant amount of debt or has a large number of medical bills to cover.
  • Why might I want to sell my structured settlement?
    Selling a structured settlement annuity can be beneficial for those who need to pay off student loans and credit card debt. If you sell your structured settlements, you could also make an investment in your future by attending college, buying a house or a car, starting your own business, or travelling around the world. Selling your settlement can allow you to do things you never thought possible with your budgetary concerns, and it will free you from feeling like you’re at the mercy of an insurance company. You can often live much more comfortably than if you were on a fixed income, and the payout will allow you access to a future you might not otherwise have.
  • If I decide to sell, how long will it take to get my money?
    Every case is different, but we always work with clients to ensure they receive their money as quickly as possible. The process of selling your settlement can take up to 90 days, given that it has to be legally finalized by the court system. However, we can work with you to secure an advance in order for you to meet financial obligations.

If you have a structured settlement agreement and want to make a substantial investment in your future, you should consider selling your annuity. Contact us today to find out your options and see how easy it is to receive the money you deserve.

Structured Settlement Annuity Benefits and Drawbacks

structured settlement annuityImagine that you’re offered a choice. Sitting across the table from you are two piles of money. One is very big, and you can take it all home with you today. The second pile is pretty small, but you can come back next month to get the same amount — and every month thereafter for as long as you want. Which deal do you take?

Many people who receive lottery winnings or are granted settlement money after an injury or accident are faced with this exact scenario. Most people would instinctively grab for the larger pile of cash. Why wait around when you can use that lump sum to reduce debt or buy a new car?

Unfortunately, structured settlements, annuity settlements, and lump sum payouts are not quite that straightforward. There are certain strings attached to each kind of deal that every claimant should know before making their final decision.

In fact, structured settlement annuity benefits often outweigh their disadvantages. Here are some of the ways that taking that smaller pile of cash might be smarter in the long run:

  • It’s tax exempt. In most cases, the money you receive from a structured settlement or annuity plan won’t be included as taxable income. That means more of your earnings stay right in your pocket.
  • It keeps you honest. Many people don’t know how to budget a sudden windfall of cash in a way that’s sustainable. Statistics suggest that 25-30% of accident victims use up all of their settlement funds within two months of recovery, and 90% exhaust the money within five years. If you’ve suffered an accident that prevents you from working, how will you survive financially if your dry up all of your funds too quickly? A structured settlement plan ensures long-term security and a steady stream of income.
  • You always have the option to sell. Structured settlement annuity benefits are nice, but sometimes you really doneed a chunk of cash to pay for unanticipated medical expenses, to put a down payment on a house, or to send a kid off to college, for example. You can sell all or part of your structured settlement at any point in its duration to a financial institution for a lump sum payout. This gives you the flexibility to use your money as you see fit, exactly when you need it.

So which pile of cash should you take? The answer is ultimately up to you. The structured settlement annuity benefits might be appealing, but for some people — especially minors — taking the lump sum to invest the money yourself can prove more rewarding over time. Consult with a lawyer, financial planner, or certified accountant to weigh your options and decide which deal is right for you.

3 Easy Ways to Reduce Your Debt

reduce debtIf you’ve found yourself in debt, you certainly aren’t alone. Nearly one in five Americans from ages 18 to 24 feel they are in debt hardship. Dealing with financial challenges can be particularly stressful and overwhelming, but there are simple things you can do to help reduce debt. Here are three ideas to get you started:

  1. Cut back on expenses and shop smartly
    The little changes you make can really add up. You could downgrade or eliminate your cable package in exchange for a popular (and less expensive) streaming service. Use cash-back services and coupons when doing your shopping. Skip the extras when out at a restaurant, and be sure you know the difference between a necessity and a desire. Even programming your thermostat and unplugging appliances can help with your energy bills every month. All of these saving strategies mean that you’ll be able to make more progress in paying off your debt every month.
  2. Save loose change
    You probably don’t give a second thought to the coins in your pocket or wallet, but you’d be surprised how much you could actually have in your piggy bank! Saving your spare change in a jar seems like an antiquated idea, but it’s a great way to save without feeling too many of the effects in your daily life. At the end of the year, you can take that change to the bank and put it towards your debt; it may not seem like much, overall, but that’s money that you probably didn’t even realize you were saving!
  3. Sell your annuity
    If you’re the recipient of an annuity, you may think your only option is to wait for your yearly check. However, you can sell your annuity and receive a cash payout. In the United States, around 35% of the population said they had trouble paying their bills or were stuck paying off medical debts in 2014, and outstanding student loan debt increased from $1.21 trillion to $1.3 trillion in one year, from 2014-2015. If you are struggling to pay medical bills, student loan debts, or credit card payments, selling your annuity is a great option to help relieve your financial burden.

By making minor adjustments and selling your annuity, you can easily reduce debt in your life. Contact us today to find out how you can quickly get cash for an annuity.

How Long Does it Take to Receive a Settlement Check?

how to get money from a settlement

Congratulations! Your personal injury case has been settled and you are awaiting your award. But what’s next? You might be wondering how to collect your settlement or how to get money from a settlement now.

Unfortunately, it’s not always a quick process. There are several factors that will affect your payout as well as several steps that must be completed before you can get paid.

The Release Form
The first step in receiving your check is to sign a release form that sets forth the settlement terms. The release form will usually state that you will not pursue any further payments from the defendant for the specific incident at hand.

The Internal Process
Some states have established deadlines by which the defendant must provide settlement funds after receiving the release form. Some states are even permitted to charge interest on the funds to ensure that there is a disincentive for the defendant to delay the payment.

Still, settlements do experience delays. For instance, attorneys may have disagreements regarding the terms of the release form, causing a delay in the creation of the form. The defendant’s insurance company may also cause a delay because of its internal process protocols.

Structured Settlements
If you have been awarded a structured settlement rather than a lump sum, it will naturally take longer for you to receive the total amount owed to you. Structured settlements are often used by courts in the following cases:

  • Severe personal injury
  • Workers compensation
  • Wrongful death

Oftentimes, structured settlements are ideal for plaintiffs because they can provide a lifetime of financial security. The money is protected from taxes, market fluctuations, recessions, and a myriad of other risks typically associated with investments. Household income has grown by 26% in the past 12 years, yet the cost of living has gone up 29% in that same time period. In other words, receiving a steady income from a structured settlement can provide stability in an ever-changing economy.

However, life happens and your needs can change in an instant. When this happens, you may want to access your money immediately.

How to Get Money From a Settlement Now
You have the right to sell your structured settlements. If you are in a financial crisis, you have the ability to use a specialty finance company like 123 Lump Sum as a direct funding source for structured settlements.

Call 123 Lump Sum today to get cash for your structured settlement and stop worrying about your finances.