What is a structured settlement payment?
A structured settlement payment is an obligated compensation resulting from the completion of a personal injury lawsuit, and is typically paid over several years. The payments are made through a significant, well-financed insurance company in smaller monthly sums or larger amounts that are received more periodically, depending on the total amount and surrounding circumstances of the lawsuit.
Selling your payments
Sometimes the monthly payments are simply not enough to get by and you would rather have more of the money sooner. There are companies, such as Annuity Transfers, Ltd., to which you can sell your payments from structured settlements at the present value of the settlement. You can then use the sale of your rights to future payments from structured settlements to invest in business, eliminate debt, purchase a home, pay tuition, or fulfill other financial responsibilities. The company will then take your structured settlement payment and offer it to interested investors, which will provide annual returns of 7 percent or more, depending on the type of payment.
In order to sell future structured settlement payments, you must have a judge approve the transaction between you and a company like Annuity Transfers, Ltd. A contract is arranged between you (the seller) and the insurance company of your choice, and that contract must be approved by the judge in terms of the seller’s “best interest.” A seller’s best interest is determined independently by the judge. Upstanding insurance companies understand the litigation rules and regulations as well as the expertise and financial capabilities to create substantial contracts with their clients.
Understand that the entire process – from the initial contract to funding – takes at least 90 days, and companies telling you otherwise have something else in mind.
Helpful tips
When choosing an insurance company to sell your structure settlement payment to, here are a few tips to keep in mind:
- Check the reputation of the company. Does it have a successful background of completed sales? Are there happy, satisfied clients you can contact or at least hear personal stories from?
- Will you be matched individually with a specific handler? The process of buying and selling payments from structured settlements is a complicated and drawn out process, so you will have to be in close contact with the company for that two month duration. You want to feel that you are in good hands with the company you choose, as well as the individual handler you will be working with.
- You want experience. You certainly do not want to work with a company that is just starting out or is not completely versed in the process of buying and selling payments from structured settlements, because inexperience and lack of knowledge might result in a denial of a court approval.
- Shop around. As with choosing a company for any kind of contract, you should compare various companies to find the right one for you. Just because a company worked well for one person does not mean another company might be better for you.
By Monica Drusch