Structured Settlements Guide

A structured settlement is an arrangement with the insurance company that involves periodic payments obtained as a substitute for release of liability. As indicated, structured settlements are often obtained as a result of lawsuits and are an excellent alternative for lump sum settlements. Structured settlements are usually to be paid from the gross income to the injured party or as workers compensation settlement by the company against which the case has been filed.

Structured settlements are often not very helpful when there is a need for immediate cash, but a part or whole of them can be sold in case of a monetary emergency. People often wish to exchange these for a lump sum that would be readily available during an emergency. Even with such drawbacks, structured settlements are still popular because the procedure usually benefits both the parties involved in an accident or an injury.

Structured settlements are best suited for cases involving minors. To choose the structured settlement option, there is certain minimum amount of procedure that has to be followed. Also, settlements that may have the possibility of being postponed to an indefinite period of time can also opt for the structured settlements instead. Since the payments would be made periodically, they would be a best option unless in cases of financial emergency.

Many countries such as the United States, Canada, Australia, and England have employed the structured settlements strategy as part of the tort law. However, the law might be defined and interpreted in different ways in different countries and the rules definitely change as per the tort law in that particular country. In spite of the differences structured settlements have requirements for the income tax and spendthrift according to the tort law in all the countries.

Before signing for a structured settlement, it would be wise to consider the effect of this settlement on the existing medical insurance. Structured settlements might prove to be a hindrance if not considered from all angles before the entering into an agreement with the other party or company.

Structured Settlements provides detailed information about structured settlements, cash for structured settlements, sell structured insurance settlements and more. Structured Settlements is affiliated with Lawsuit Loans In Texas.

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Before we start diving into the details of insurance settlement, it is important to understand its definition. A settlement in itself means that you would collect a certain amount of money over a certain period of time as a result of a personal injury. These payments can spread over several years, giving you a fixed income over a time period and is advantageously taxed both on the state and federal level. The only disadvantage is that once you have agreed upon the structure of payment, you can not decide half-way that you want to be paid in a one-time lump sum.

What if you encounter a financial burden and need the money immediately? It does not matter what you need it for, whether it is an emergency medical expense or because you want to make an investment or you simply want to purchase something for you to enjoy. The bottom line is, you need the money fast.

Insurance settlements can be the option to help solve your problem. You can sell off your settlement in exchange for liquid cash. You can decide to sell the whole amount of your settlement or just a portion of it. The idea is that you sell the rights to receive the amount in exchange for an amount you agreed upon.

There is no fixed amount or percentage you can get for an insurance settlement. The procedure basically entails your claims adjuster to complete the estimate at the time of inspection, proposing to you an amount written on a check. You would want to find an insurance company with a higher rating who can usually issue a higher price for the settlement.

Consider the type of your insurance settlement and the amount before you agree on anything. If you are uncertain of what your next move should be, do not take any action without seeking legal or financial advice. You do not want to make a decision you would regret.

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Many people who know in the back of their minds that they got the
possibility to transform a monthly payment or annuity long term
payments into a big lump sum and by that to relieve some
temporarily financial problems, or need to buy a new car or a house
or help their children and so forth are tempted to exercise this
process into action.
Although it is a very natural feeling and sometimes even a real life
need or deep inner quest for power and control, it is not in their best
financial interest to say the least.

It is no wonder that the U.S federal laws encourage long term
payments in both cases like Structured settlements and lottery
winnings. There are many good reasons for that and I’m
going to spell them out as clear as I can.

- In some countries around the world it is legal to pay for lottery winning in one lump sum. Experience shows
many of these people lose most or
all of their money in a few years
Time, due to the following reasons:

- Ordinary people who get into their possession a very large sum of money don’t really know how to manage their treasure or how to invest it wisely, they are not prepared for it and they are
overwhelmed with a delusion of over abundance of wealth, they
become totally careless on how and on what they spend their money.

- Even if they invest their money, they go to high risk speculative
investments as they try to get high yields. Instead of going for
a much solid and safer, “widows & orphans” type of investment
portfolio. Neither do they go for the golden middle way in between
of a mixed portfolio. They don’t use investments advisers or
financial consultants.

- They become over generous with their family and friends, they
buy their children homes, cars or any other materialistic requests,
they “lend ” money to a friend in need…

- They listen to shrewd business people who talk them into investing
into all kinds of business adventures that seems to them very
profitable but in a short while turn into total failures and the money
is gone.

- All kind of addictive behaviors like betting horse races or going to
play the roulette in the casino are now intensified with the feeling
of power and wealth, it might drive the person to gamble high sums
of money as if there is no tomorrow.

- Believe it or not but criminal elements might engage in putting
pressure to extort monies from the overnight rich poor guy.
They might threaten to harm his family etc’

- Charity institutions start to call all day and night asking for
donations to a very noble causes, they even send some slick
reps to convince him to donate money.

- His own children, some times his spouse becomes very greedy
and exert emotional pressure to give them more and more money.
In some cases the sudden riches literally ruined the families.

As I have shown you above, getting a large lump sum of money
might be a risky thing, this is In addition to the fact that you are
loosing a lot of money which was Tax free, that alone might be
a difference of anywhere between 35% - 65% , add to it the profits
of the fund who bought the annuity from you and you are loosing
big time. It is not recommended for an injured or a disabled person,
to transform the whole Structured Settlement long term payments
into one big lump sum or you might find yourself one day without the
money and facing high medical expenses and other bills you cannot afford.

MBA - International Trade & Finance - Heriot-Watt University. Bsc. Computers and Information Systems - Long Island University - C.W Post Campus. Married with two Children.

http://annuity-structured-settlements.blogspot.com/

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Birth injury refers to any kind of physical injury to a newborn during or right after birth. They are highly probable if the infant is bigger than normal or is premature. Bigger babies are hurt when they get caught in the mother’s birth canal, or by the physician’s efforts to pull out a baby with forceps. The injuries are caused by delay in treatment, miscalculation in timing, wrong medication and medical negligence.

Another birth injury that can occur is Erb’s Palsy that causes nerve damage in a baby’s arm due to pressure put on the nerves during birth. Similarly, cerebral palsy is caused by injury to the baby’s head during birth. Bruising and fractures during birth resulting from negligence and or miscalculation are also common.

The doctor’s liability needs to be established in order to sue. Medical practitioners and a personal injury attorney need to be involved. Because death or injury during birth causes trauma to the parents of the child, these cases are handled with great sensitivity by lawyers experienced in cases of birth injury lawsuits.

The settlement amounts for birth injuries tend to be large, sometimes going up to millions of dollars. This is because the settlements need to cover a lifetime of medical and other expenditures for an injured and possibly disabled child. The highest settlement awarded in the United States for a birth injury was $120 million. In another case, a woman died during labor, and her baby was born severely handicapped due to the administration of the wrong drug. Her family was awarded $20 million in a lawsuit against the faulting nursing home.

Birth injuries are traumatic for the family, as well as the injured child. A fair settlement helps them to partly overcome their trauma through proper medical care, therapy and counseling. It ensures a secure future for a child who may have to lead a physically or mentally impaired life.

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Viatical settlement originated from the Latin word ‘Viaticum’, meaning the Eucharist given by a priest to a dying person. Viatical settlement therefore refers to the purchase of the life insurance policy before the maturity date or the death of the policyholder. In it a lump sum amount is paid to the ill-policy owner, also called as viator, in exchange of the death benefits of the policy.

Generally those policy holders who are suffering from very serious diseases like AIDS, cancer, heart problem, kidney failure etc and who are having a very small life expectancy will choose viatical settlements with their life insurance policies. This cash life settlement reduces the financial stress of the policyholder during his/her final days. Generally cash life settlement companies purchases the insurance policies from the viators for a fixed percentage of the policy amount depending on the number of premiums paid hitherto and the health conditions of the policy owner. Then they make all the arrangements with the insurance companies requesting the change of ownership and beneficiary of the insurance policy. Once it has been done, the company pays the remaining premium amounts to the insurance company, and upon the demise of the old policyholder the company receives the full policy amount from the insurance company.

However the company has to face the risk involved if the viator survives even after the predicted life expectancy or if the insurance company undergoes bankruptcy. On the other hand, the risk for the viator is the settlement at lower price than the value of the policy. So risks are there for both the parties. If the company resells the policy to some other cash life settlement company, the old policyholder doesn’t hold any responsibility against the second buyer company. The policyholder can sell any type of insurance policy, term or group, under viatical settlement.

It will take almost four to five weeks for the policyholder to get offers for the purchase of the policy and up to three weeks to get the amount from the buyer. The viatical cash settlement companies purchase policies from those people having the life expectancies of up to five years. Even these companies may insist on the minimum amount of the policy and the reputation of the insurance company before providing viatical settlement. From the point of view of the policyholder, it is very essential to be very cautious before choosing a suitable viatical life insurance broker. Owing to the illness, mentally or physically, the policyholder may not be in a position to choose a viable broker. He/she should take ample time to take an informed decision. Moreover there should not be any pressure on the policy owner to make him to accept the offer give by the broker. The policyholder can change his time at any point of time. If the policyholder’s physical and mental status is not permitting to take right choice of the broker, then there is one alternative available in the hands of the holder. He/she can opt for Accelerated Death Benefit (ADB) on the insurance policy. Under this, the policy owner can avail a part of the death benefit of the policy now with the remaining benefit going to the beneficiary of the policy. However the policyholder should continue paying premiums.

Life Insurance Settlements provides detailed information on Cash Life Insurance Settlements, Corporate Life Insurance Settlements, Life Insurance Settlement Loans, Life Insurance Settlement Options and more. Life Insurance Settlements is affiliated with Insurance Settlement Loans.

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Life settlements can be a viable option for seniors willing to exchange their life insurance policy for immediate cash. A life settlement is the sale of an existing life insurance policy for a lump sum of money. It allows policyholders to access the fair market value of their life insurance by selling their policies and receiving payments greater than the cash surrender value.

Technically, a life settlement contract allows you to sell your insurance policy to a third party in exchange for a reduced amount of the face value. This is possible because a life insurance policy is actually property, like a car, house, stocks and bonds that can be legally sold. A life settlement essentially lets you extract value today from an asset that is generally thought to only have a benefit when you die. Typically, life settlement transactions involve life insurance policies of a large face amount; “key-person” coverage or corporate-owned life insurance; or policies representing excess coverage that is no longer needed.

Here’s how a life settlement works: When a life settlement company buys your life insurance policy, it pays you a percentage of the policy’s face value. Then the life settlement company becomes the new beneficiary of the policy at maturation. As such, it is responsible for all paying all future premiums and collects the entire death benefit when the insured dies.

A Growing Industry

With a life settlement, you can receive a large sum of cash in exchange for your insurance policy while you’re still alive. This eliminates premium payments, accommodates the changing needs of your dependents and provides greater financial flexibility.

Life settlements can also be used for charitable giving. Complex estate and tax planning strategies can apply when using life settlements in a planned giving program. But here’s how this works in simplest terms: You donate your life insurance policy to a charitable organization, which immediately sells the policy for a lump sum of cash via a life settlement.

These and other benefits are making life settlements an attractive option for seniors with unwanted/unneeded insurance policies. Consequently, the life settlement industry has seen significant growth in recent years. A study by Conning & Co. Research found that senior citizens owned approximately $500 billion worth of life insurance in 2003, of which $100 billion was owned by seniors eligible for life settlements. Since 2003, more and more of these eligible senior clients have sold their policies and helped the market increase.

Separate research by the University of Pennysylvania’s business school found that life settlement providers paid approximately $340 million to consumers for their underperforming life insurance policies, an opportunity that was not available to them just a few years before. “We estimate that life settlements, alone, generate surplus benefits in excess of $240 million annually for life insurance policyholders who have exercised their option to sell their policies at a competitive rate,” according to the research.

Selling Your Policy

You could be a prime candidate if you are of retirement age, have paid off your mortgage and other debts, and no longer require the financial protection of life insurance. The amount you receive will depend on your age, health, death benefit, and the number of years your policy has been in force.

Seniors with the greatest chance of selling their policies are those that are older than 65 years of age, have a calculated life expectancy of more than two years (but less than 10 years) and may have experienced a health change that has led to their insurance premiums increasing. Depending on the policy holder’s life expectancy, just about any type of policy can be sold, including universal life, whole life and convertible term contracts. However, policies generally must be valued at least $100,000.

Determining whether to sell your life insurance policy is a purely personal decision. You might consider a life settlement under the following circumstances:

Your employment status has changed.

You need additional funds to pay medical/long-term care expenses.

Your insurance premiums are too expensive and you can no longer afford them.

You would like to implement a charitable or family gifting plan.

You are facing bankruptcy.

Consulting with an Advisor

Before you decide to sell your insurance policy, you should examine all the available options, advises the American Council of Life Insurers, a Washington D.C.- based trade group. And instead of going it alone, consult with a financial advisor who is familiar with life settlements. This could include account/CPA, lawyer (especially elder law attorney), financial/estate planner, certified senior advisor or charitable trust officers.

Additionally, you might consider working with a brokeralthough your financial advisor can submit your case to the life settlement company directly. However, in an industry where market value for life insurance policies may be unfamiliar, brokers typically do the best job of getting fair market value for policies. They submit life settlement cases and bids to multiple companies, which can facilitate negotiations between high bidders.

Keep in mind that life settlement companies are essentially investors that fund many transactions each year. They hold purchased policies as portfolio assets, rather than making them available to outside investors. They also have in-house compliance departments to carefully review transactions, and they are backed by institutional funds from a major bank.

Steps to Life Settlement Transactions

Wondering what happens during life settlement transactions? Here are the steps involved in the typical transaction:

Step 1: You consult with an advisor and decide to sell your policy.

Step 2: You and your advisor select a broker.

Step 3: The broker submits your case (and you provide a release for your medical information) to various companies.

Step 4: If your policy is eligible for a life settlement, providers send offers to the broker.

Step 5: You accept an offer and then complete the company’s closing package.

Step 6: The life settlement company places a cash payment in escrow and submits change of ownership forms to the insurance carrier.

Step 7: Once the paperwork is verified, the funds are transferred to you.

David Springer is a consultant for Sovereign Funding Group. Sovereign Funding Group is an experienced, reputable company that offers convenient, no-risk services to help you with the selling of your deferred payments and business financing, including life settlements.

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As we edge closer to retirement age, it is perfectly natural for us to be apprehensive about our financial future once we no longer have a paycheck coming in. After all, a number of factors have caused the future to appear bleaker than in years past. Social Security and its ability to finance the retirement of the baby boomers is in serious doubt with just about all the experts concluding that the fund will go bankrupt in the coming decadesit is not a question of if, but when. Healthcare costs continue to soar well beyond the rate of inflation with no apparent end in sight. Add to these two factors the fact that energy costs continue to rise at unprecedented levels and it is not hard to see why living on a fixed income seems like a very scary proposition for many people considering retirement.

If you are considering retirement but fear that your savings account may not be able to weather the challenges posed by the problems listed above, you may consider a life settlement as a means of supplementing your income and building a financial cushion. Now you are probably wondering exactly what life settlements are and how they can make you money and this is not surprising because many people do not even know how they exist. But, if you have a life insurance policy then it is definitely worth your time to read on and learn the advantages that a life settlement can offer you as you contemplate retirement.

Life settlements are also known as senior settlements and they are simply an agreement between someone with a life insurance policy and a company looking to buy that policy. The reason for this is because the death benefits paid in a life insurance settlement can be substantial. After all, anyone who has paid into a life insurance policy for a number of years has a policy with real value. The company offering you a life or senior settlement for your policy will give you a percentage of the total death benefits paid in a life insurance settlement in return for buying your policy and thus receiving those benefits upon your death.

Now maybe this percentage is 50% of the total benefits or perhaps even less. They cannot offer you the total amount or a figure that is too high because they don’t know how much longer you will livebasically, they are taking a gamble based upon your life expectancy. In between the time you sell your policy in a senior life settlement and the time in which you die, they must continue paying the premiums on that policy. Now although they may only give you 50 cents on the dollar for your policy, this figure is still generally higher than what you would receive if you would cancel the policy yourself and receive the surrender value. But, the fact is, the amount you would receive from a life settlement is almost always higher than the surrender value because these companies must offer you some incentive to sell your policy to them instead of just canceling the policy.

The money you receive from a senior settlement could be that financial cushion you need to feel secure about retiring in these very uncertain times. Retirement should be a time to relax and enjoy the remaining years you have in life, not a time when you are stressed out about paying bills and surviving on less than you need to be comfortable. If you have a life insurance policy, then give some serious thought to senior settlements because they just may be the solution you have been looking for in order to give you that added cushion that will make your remaining days far more enjoyable.

Jim Prescott, CPA business consultant for over 30 years specializing in small and medium size businesses that range from closely held to publicly traded companies. Jim is a Partner in CPA firm Prescott Chatellier Fontaine & Wilkinson, LLP that offers audit, accounting, investment advice, tax planning services, estate plans, pension plans consulting and insurance advice.
In addition to the CPA firm’s web site Prescott Chatellier Fontaine & Wilkinson, LLP you can find more information and Articles on Life Settlements at Insurance Settlement Review

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A life insurance settlement is the purchase of the existing life insurance policy by a third party for cash. If any senior citizen of age is over the age of sixty-five, has some health problems or is terminally ill, is in a financial crisis, then he/she may choose a life insurance settlement as an option for discharging all the financial obligations. Generally life insurance settlement companies or brokers purchase insurance policies from people. These companies pay a fixed percentage of the policy amount which will be higher than the cash surrender value of the policy offered by the insurance company but which will be less than the actual net death benefit of the policy. The fixed portion depends on the age and the life expectancy of the policyholder, market rating of the insurance company, policy size, number of premiums paid etc. The life settlement company submits all the necessary documents to the insurance company requesting the change of the ownership and the beneficiary of the policy. Once it gets the confirmation from the insurance company, it will start paying premiums on the policy and collects benefits on the demise of the old policyholder.

However the policyholder should be very careful while making settlement procedures with the settlement company. Here are the tips and considerations of much importance to be considered by the policy owner.

Tax liability

Generally, the amount paid in the form of premiums by the policy owner is tax-free but the amount received from the insurance settlement company over the premium amount is subject to tax. However before the payment of the tax it is advisable for the policyholder to consult his/her personal tax advisor.

Information about quotes and fee

The policy owner needs to shop around to get the information about different competitive prices for his insurance policy. He/she should find out clearly with the life settlement company the fee to be paid, if any.

Licensed broker

Before making a contract with the life settlement company, the policy holder has to make sure that the company has the recognition and license from the state government or other similar institution.

Consulting financial advisor

It is essential on the part of the insurance policy owner to contact the state government insurance agent for having full knowledge about the life settlement contracts and the risks involved in them. He/she has to consult personal financial advisor to know the better options available, if any.

Settlement process

The policyholder needs to understand the entire process of life insurance settlement thoroughly and has to decide whether to sell his/her life insurance policy directly to the life settlement company or through a life settlement broker.

Other considerations

The policy owner should be truthful in giving answers in the application of settlement. He/she is expected to have complete knowledge about the laws applicable to the life insurance settlement contract in the state, if any. He/she should ensure that the settlement proceeds should be credited to the escrow account of the policyholder with a reputed financial institution for safeguarding the process of transfer of the amount.

Life Insurance Settlements provides detailed information on Cash Life Insurance Settlements, Corporate Life Insurance Settlements, Life Insurance Settlement Loans, Life Insurance Settlement Options and more. Life Insurance Settlements is affiliated with Insurance Settlement Loans.

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The physical and emotional demands of a terminal illness are traumatic enough - both for the person and for the near and dear ones. Financial strains only serve to compound the trauma. Viatical life insurance settlements, if handled carefully, can provide financial relief. The process of viatical settlement involves the selling of a life insurance policy by a terminally ill person whose life expectancy has been predicted for about two years or so, to unrelated investors - which can be banks, private companies, or brokers.

This gamble on death may seem unpalatable to many but can provide help to people by easing their financial strains and providing the cash to get better health and medical care.

The seller of the policy gets cash surrender value while surrendering the policy. The surrender value is less than the face value of the policy. But the seller needs to keep in mind that the value he gets for selling the policy should be more than what he would other wise get by surrendering his policy.

While selling one’s life insurance policy, he or she should keep in mind that there may be accelerated benefits associated with the policy. These benefits are also sometimes called living benefits. These are benefits that a policyholder gets from the insurer before he dies.

Any decisions involving the sale of life insurance policy will have a deep emotional impact on the seller and his family members. So before coming to any decision it makes sense to talk to a lawyer or a financial planner.

The other alternative is to contact the state Insurance Commissioner or the insurance company’s claims department so as to explore the maximum alternatives. The insurance companies can sometimes offer accelerated benefits or even loans. Accelerated benefits are usually added to the policies for additional premiums, while there are companies who do not charge any additional premiums.

Viatical Settlements provides detailed information about viatical settlements, viatical life insurance settlements, viatical life settlement associations, and more. Viatical Settlements is affiliated with Sell Structured Settlement Payment.

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Remember why your structured settlement was set up in the first place. Was it to pay for medical expenses on a ongoing basis or to take care of basic monthly living expenses? If the reasons your structured settlement was set up for don’t exist any longer, then you might want to consider selling it. But remember, be careful, look at all yours options first.

If you have other money sources to explore, I suggest using those options first. Selling your structured settlement should be a last resort.

If you still feel you must sell your structured settlement look for someone you can trust who also knows what their doing and know that it will take at least a month or more before you can get your money.

The reason is that you need a court order. The state structured settlement protection statutes and the Victims of Terrorism Relief Act of 2001 which created

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