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.

Common Myths About Selling an Annuity Settlement

selling an annuity settlementSome people are skeptical about selling an annuity settlement. The thought of getting a lump sum of cash now always sounds too good to be true.

They may have heard well-meaning advice from friends who tell them to stick to their monthly structured settlement payments. They may be concerned about the security of their financial future. Or they may simply not understand the process of getting a lump sum annuity payout and think it must be some sort of “get rich quick” scam.

We’re here to clear the air. Sometimes, selling an annuity settlement in exchange for a larger sum of money can be enormously beneficial. Here are some of the most commonly heard rumors surrounding the selling process, and the truth behind these myths.

Myth #1: I have to sell my entire annuity at once.

Not true. You can sell a portion of your annuity payments, large or small, to help get you the money you need upfront. In fact, you’ll be working with a financial expert to help you determine exactly how much you should sell to get the most out of your money depending on your needs and situation. Many people opt to sell settlements at some point in their lives; at the end of 2013, there were 34.8 million deferred annuity contracts in place with more than $2.58 trillion in combined value.

That’s a lot of cash waiting to be claimed.

Myth #2: I’ll get less money in the end if I sell my structured settlement annuity now.

Not necessarily true. While there are some fees involved in selling your annuity, there are ways you can invest that money to grow your financial assets in the long run. For example, you might buy a house requiring a 5, 10, or 20% down payment on the sales price. The more you pay upfront, the less you’ll be spending on interest and mortgage payments later.

Myth #3: I won’t be able to pay my monthly bills without my structured settlement check.

Again, your finances are what you make of them. Selling an annuity settlement might be the push you need to start a business or get an education, which can lead to a higher-paying job and a better future. According to the Kauffmann Foundation, it costs an average $30,000 to launch a new business today. With that money, you could be working for yourself instead of depending on a monthly check.

Money management can be stressful, but selling an annuity settlement shouldn’t have to be. You can speak with the professionals at 123LumpSum to learn more about the process and to discuss any concerns you have to ensure that your decision is the right one for your future.

Back to Basics: How do Annuities Work? How do They Work for You?

annuity

With advances in medicine and technology, it’s becoming more and more of a possibility that you may outlive your income. Household income had increased by 26% in the last decade, but so has the cost of living. If you’re worried about outliving what income and savings you do have, an annuity may be the right investment.

However, there’s a lot that goes into an annuity and you may not have all of the information you need right away. So whether you’re looking for a refresher or preparatory information, here’s what you need to know to make annuities work for you.

What is an Annuity?
Annuities are long-term investments issued by insurance providers to assist people who fear that they may outlive their current income stream. These long-term investments come in varied lengths and payout periods, but the most common are those paid over the course of 25 years or for life. Most people choose to invest a lump sum up front, and then manage a smaller payment into their monthly expenses.

How Can Annuities Help Me?
In the event of your passing, a structured settlement annuity could help your family in the future. Approximately 26% of Americans report not paying their bills on time, and the average household pays a total of $6,658 in interest annually. By investing your money in an annuity, or even allowing your family to sell your annuity, you could be relieving them of a potentially large debt burden.

What Type of Annuity is Best for Me?
There are multiple types of annuities, but the most common are variable and fixed. A variable allows you to place investments in different places and earn rewards based on their results. This is better for those who have a higher tolerance for risk. Fixed, on the other hand, requires you make fixed payments for the duration of the contract period.

Investing in annuities is a serious financial choice, and should not be taken lightly. Many people choose to sell their annuities if they don’t perform the proper research. Whether you’re buying or selling, be sure to have all of the proper information available to you.

Should You Sell Your Annuity? 3 Common Scenarios

sell your annuityBeing the recipient of an annuity or structured settlement payment is great in a lot of ways. You have the security of an additional stream of income, no matter how large or small your checks may be or how frequently they may arrive.

Yet it can also be frustrating. Sometimes it would be convenient to get cash for settlements or lottery winnings up front instead of having to wait until the next check arrives. As we all know, unexpected financial challenges can arise, and having access to that money would ease your stress.

Well, you’re in luck. There is a way you can sell your annuity, either partially or in full, and receive a larger sum of payment straightaway. Consider selling your annuity to a trusted financial institution in order to get the most out of your earnings.

  • You Need to Get Yourself Out of Debt.
    Debt is unfortunately all too common n this economic climate. Some one in five young Americans, age 18 to 24, describe themselves as being in “debt hardship,” which can cripple financial opportunities for a bright and secure future. If you sell your annuity for enough money to pay off student loans or credit card debt, you can buy yourself a pathway forward.
  • You’re Ready to Make a Lifetime Investment.
    Buying a house? The average cost in 2010 for a new home was $272,900, and mortgaging companies can require a down payment of up to 20% of the sales price. The more you put down now, the less you’ll be paying in interest and mortgage rates down the line. You could really save yourself a lot of money in the long run by selling a structured settlement for a hefty down payment.
  • You Have Ongoing Medical Bills.
    Unexpected healthcare needs — and even the expected ones — can be incredibly expensive without proper insurance. Especially if your medical needs are a result of an accident or injury that earned you your annuity payment in the first place, don’t hesitate to ask about selling that annuity in exchange for up-front funds. This way you can avoid mounting debt.

Don’t limit yourself to receiving small incremental checks when you could be receiving a lot more. Talk today with a specialist about how to sell your annuity and access the money that’s rightfully yours.

How to Sell an Annuity in 3 Easy Steps

sell an annuity

You may be surprised at just how easy it is to sell your annuity or structured settlement payment plan in order to get settlement money now.

When you sell an annuity, you essentially give up your small increments of payment installations in order to receive all of your lottery winnings or structured settlement agreement money at once, in what’s called a lump sum. There are many reasons why people choose to sell an annuity: to pay off credit card debt (the average consumer has 3.5 credit cards), to put a down payment on a house (the average cost in 2010 was $272,900 for a new home), or to simply help make ends meet (some 40% of American families spend more than they earn). After all, it’s your money, and you are entitled to receive it whenever you want.

The process of selling an annuity involves some serious consideration on your part, but in the end there are just three simple steps standing between you and your lump sum payment.

  1. Contact a financial institution that specializes in annuity sales.
    First, you’ll need to get in touch with a credible financial institution that understands how annuity sales work. Know that there can be differences in rates between sellers, so be sure to shop around and ask for a quote on how much you can actually expect to receive as a lump sum by the end of the process.
  2. Arrange a court date.
    Once you’ve decided on a seller, you’ll have to schedule an appearance in court. This ensures that your decision to sell an annuity has valid reasoning and will not unduly jeopardize the financial future of you or your family. The judge will then sign off on your sale.
  3. Walk away with your money.
    Once you’ve submitted all of the proper paperwork, you should have access to your money within just a few days. Then, the rest is up to you!

While payment installment plans can provide a nice slice of income, sometimes we all need a little extra help up front. Bear in mind that you can also sell only a portion of your annuity — you don’t necessarily need to sell it all at once. That way, you can have the best of both worlds with immediate funds and long-term security.

Paying Off Your Debt Fast: Top Tricks

paying off your debt fastDebt is a major problem in the U.S. today. Throughout every single household, adults owe an average $11,244 in student loans, $8,163 on car payments, and $70,322 in mortgage payments. Try as you might, paying off your debt fast simply isn’t a feasible solution for the 26% of Americans who admit having trouble making their monthly bill payments on time.

But if you’re the recipient of an annuity or structured settlement payment, there’s a better way. Instead of waiting for your payments to trickle in over the years, or even over the decades, you can sell your annuity or structured settlement agreement to get cash now.

Many people don’t realize that selling your annuity is even an option, let alone the benefits it can have for your financial situation. While the comfortable security of that monthly check might help you pay your bills, it also prolongs your debt. The average household pays $6,658 in interest each year — expenses that could be wiped out quickly when you get settlement money now and can start paying off your debt fast.

The process is simple, and you don’t necessarily have to sell your entire structured settlement at once in order to receive a lump sum payment in return.

First, talk with a financial institution authorized to purchase annuities or settlements. They’ll not only help guide you through the process but discuss your options and offer a quote.

Then, you’ll have to go through some paperwork, which is to be submitted to a judge in a court proceeding. They simply want to know how you’ll use your direct cash and that the sale of your annuity will not immediately jeopardize you or your family in any way.

Finally, you’ll walk away, cash in hand! It’s really that easy, especially when you have a professional helping hand along the way.

Think of what you could do to start paying off your debt faster if you had the money in the bank. No more car payments. No more student loans. A simpler future awaits when you start living the debt free life.

Investing Your Money: A Brief Guide for Millennials

investing your money

Perhaps no other generation has been more affected by the great economic recession of the 21st century than Millennials. Close to one in five Americans today between the ages of 18 and 24 describe themselves as financially suffering from “debt hardship.”

The reasons stem from both sides: Not only has the cost of higher education skyrocketed — the College Board reports that average tuition and fees for the 2015 academic year were $31,231 for private institutions and $9,139 for public ones — but the job economy upon graduation into the “real world” has been grim for years.

Investing your money might be the very last thing on your mind when you’re already concerned about paying the bills on time and figuring out ways to reduce debt. But in fact, investing money now, during your youth, is the smartest way to ensure a secure financial future for yourself.

Millennials haven’t got it all bad. Here are three of the top reasons you should start investing your money today.

  • Time is on your side. Everyone knows that investing in stocks or funds usually takes time before you see your money grow. Invest your money now — even if it’s only a modest amount — and with time, it can turn into more funds that you can use years from now to make that down payment on your dream house or send the future kids off to college.
  • The economy is recovering. It may seem to move at a snail’s pace, but all signs indicate that the American economy is back on the rise and will continue to have a strong presence in global finance. That means that it’s a safe and smart time to make investments while prices are still low and climbing.
  • Technology is an asset. Millennials are known as the tech-savvy generation, and as investing moves increasingly to the digital and even mobile realm, the younger generations with the right know-how will be well poised to take control over their financial management strategies.

Yes, times are still tough. A full 26% Americans struggle to even pay their bills on time. But the old adage “Buy low, sell high” has never been more pertinent to young people looking for ways to increase their finances without hardly lifting a finger. Take stock of your future and start investing your money as soon as you can.

Sell Your Annuity and Pay Off Debt Now

selling your annuityGetting out of debt can feel like an uphill battle. If financial challenges are bringing you down, you are not alone. Nearly one in five Americans considers herself as being in “debt hardship” at any given time, and a quarter of adults say that they struggle to pay their monthly bills on time. In fact, American consumers owe a total of $11.91 trillion in debt, and the average adult in the U.S. owes around $3,761 in revolving credit.

You might be one of the many Americans hoping to sell annuity payments in order to redistribute your money. By selling your annuity, you can gain access to a lump sum of cash, thereby reducing your debt so you can begin to build up better credit immediately.

An annuity is a beautiful thing. For the most part, receiving a steady income is highly advantageous. It is good to know that you can rely on future payments. However, life can change in an instant and you may need access to your money at a moment’s notice. You can’t always wait. Luckily, there are institutions through which you can collect your money as one lump sum. These businesses will buy your annuity payments in their entirety or just a portion of them. Some individuals choose to sell just a piece of their annuity in order to obtain a small lump sum while still ensuring financial security with the promise of future payments.

Before selling your annuity payments, make sure you understand the process thoroughly. You will not occur any court fees from selling annuity, but there will be other fees such as legal fees, program fees, and any other fees imposed by your insurance company. For more information, discuss your options with a specialty finance company.

Finance companies that provide annuity-buying services function to assist you in making positive life changes. Professionals are equipped with the legal expertise and institutional financing skills necessary to help you make your financial dreams come to fruition.

Don’t wait around for your annuity payments to finally add up over time. Get your lump sum of cash now in order to reduce debt and establish financial stability.

Inflation Wage Gap

“Inflation” might be a word you’ve heard floating around when people complain about the price of items or the state of wages, and especially income inequality, but what exactly is it? In short, inflation is the necessary cost of an expanding economy. The Federal Reserve, which has the power to change the national interest rate, keeps rates low to stimulate spending. This drives demand and ultimately, economic growth.

For instance, the dollar has lost a lot of value in the past 100 years, which was caused by inflation. In 1915, a person with $4.26 could buy the same amount of food, clothing, and other necessities as $100 would buy today.

The Federal Reserve targets a 2% core inflation rate, meaning that as long as prices (excluding volatile food and energy) only rise 2% a year, the economy is expected to grow at a healthy rate. In the U.S., the annual inflation rate is 0.1%. Unfortunately, not everyone’s income increases more than 2% a year along with interest rates. This is one source of income inequality.

Over the past few years, however, Income inequality has been on a steady rise. From 2000 to 2006, average wages remained flat despite an increase in worker productivity of 15%. In those six years, corporate profits increased 13% per year. And that was before the recession, which exacerbated economic inequality in general, delivered a devastating blow to the U.S. economy.

Indeed, this massive gap in earnings is one of the major issues addressed by social justice workers, the media, and politicians. It is often met with public outrage, especially after the 2008 recession. The Pew Research Center reports that approximately 61% of Americans say that the U.S. economic system favors the wealthy, while just 35% said that it’s fair to most people. A similar share (66%) of Americans said the gap between rich and poor had increased in the past five years, and near three-quarters of respondents said the rich-poor gap was either a “very big” (47%) or “moderately big” (27%) problem.

Perceptions of income inequality also vary by class, with 54% of low-income people and 49% of middle-income people calling the rich-poor gap a “very big” problem. Only 36% of high-income people agreed. A third of the high income group said the rich-poor gap was either a small problem (19%) or not a problem at all (14%).

Rising interest rates and stagnant wages drive many people into debt cycles and eventually into worsened states of poverty. There is some government aid, and people can file for bankruptcy should they become unable to manage their debt. Some people, if they already receive them, even sell their structured payments. Selling off an annuity can cost surrender charges of up to 10%, but it can help some people get the cash they need to help get ahead of the challenges posed by inflation.

selling off an annuity

Annuities 101: What They Are For and How to Use Them

purpose of an annuity

New to your annuity? Here’s what you should know!

What Is An Annuity?
An annuity is a promise made by one party to make a series of payments to another party for a given period. Basically, it’s a contract between you and an insurance company. First, you buy an annuity, sometimes in a lump sum, and sometimes by making payments over time. That insurance company then invests your money. Some annuities, called “immediate annuities,” start making payments to you immediately, while another are available after a delay, which will grow your investment. This is called a deferred annuity, and it’s particularly popular. At the end of 2013, there were also 34.8 million individual deferred annuity contracts in place exceeding $2.58 trillion.

What Is Their Purposes?
The purpose of an annuity, which was created by life insurance companies originally, is to help pay for things like disability and long-term care — essentially, its purpose is to generate income for you. Payments can last for a couple of years, or even for your whole life. This supplemental income could seriously help you meet monthly expenses, and reduce debt over time. Consider this: the average U.S household pays $950 in interest every year. Annuities are available in many different varied lengths and payout periods; two of the most common are payments over the course of 25 years or payments until death.

On the other hand, deferred annuities also have their perks. Before your income payments begin, you can take withdrawals from the contract.

How Can I Use Annuities for Retirement Planning?
Annuities are actually very commonly used for just this purpose! They have the handy power to convert a lump sum into structured settlements for the rest of your life, or to invest over time, and later convert the money into income payments. Growth in your annuity value is also normally not taxed until you take money out of your contract. The purpose of an annuity is to help invest your money for later when you might not be as financially stable as you are now! Letting your money grow up could be the best decision you ever made.