Structured Settlement Investment
While we all know that long term investments can be highly profitable financially. But what happens when you have won the lottery, received annuities, an insurance payout or a court judgement? You may be given the option of receiving a lump sum or receiving a structured settlement investment. What is the best choice to make?
A structured settlement is an agreement that a specific amount of money will be paid to the injured party over a specific period of time. Numerous reasons may sway a person to go this route. Initially, a structured settlement may prove to be a much more profitable situation. To clarify, a lump sum of money will be taxed, while a structured settlement will guarantee money for a set time and is non-taxed. For instance, receiving smaller increments of money may not have the dramatic life-changing alterations as when you receive a large amount of money.
However, what happens when an unforeseeable life event occurs such as property loss, divorce, unpaid medical bills or the inability to work? Enter structured settlement investors. Companies buying structured settlements have cropped up all over the United States and while this is not necessarily a new practice, the necessity of cashing in a structured settlement has proven to be beneficial, not only to those looking to sell their structured settlement, but also those who purchase structured settlements.
We have all viewed the ads on television claiming, “It’s your money! Get it now!” but what are the benefits? It really boils down to what is transpiring in the present. When an individual who receives a structured settlement begins to feel the financial pressure of home repairs, debt or college tuition they may decide it is more beneficial to receive a lump sum of money to assist with these situations.
What about the drawbacks? The first thing to be made aware of is that if you should choose to cash in you structured settlement; you will not receive the amount set forth in the structured settlement agreement. Why? Well, the simple answer is that investors must be guaranteed a real profit. Add extraneous fees and other hidden costs and sometimes the amount of money received in selling a structured settlement can be significantly less. Additionally, where structured settlements are not taxed, receiving a lump sum after selling your structured settlement will be taxed.
If there is a willing seller and a willing buyer, transferring a structured settlement can be done. However, there are laws and federal regulations pertaining to the sale of structured settlement that have been enacted to insure an equitable agreement takes place. Thirty-eight states have ratified laws such as these, with more states poised to follow. This is important to understand because when you petition the court for the sale of your structured settlement, your monetary situation and economic necessities will need to be explained. Many people do not realize that they can sell only a portion of their settlement in an effort to satisfy their current financial needs and still invest in the future.
With the recent financial crisis looming overhead, many people desperately need financial relief. However, making sure you receive the most bang from your buck is also important, too. Retaining an attorney or seeking assistance from a financial expert is imperative before making any agreements or signing on the dotted line. Researching reputable structured settlement investment companies is also essential to ensure you are receiving the best possible deal.