Tuesday, May 30, 2006 

Structured Settlement Factoring

Have you received a structured settlement recently? A structured settlement can be a good thing if you have been a victim of malfeasance, have been severely injured or can no longer physically work. Structured settlements will help you pay bills. But what do you do if you have a structured settlement, which is coming your way and you really have decided that you might prefer to have the cash instead? Well, if this is the case you are in luck because there are companies, which will buy your structured settlement for a discounted price?

This is similar to factoring which is used in businesses, which need to maintain their cash flows. They can sell accounts receivables to another company as an investment and get the money that is owed to them in advance. For instance let’s say a company, which does janitorial services for a government agency, which are notoriously slow to pay and that government agency owes them $30,000 for services already completed? A factoring company will buy that check which is in the mail so to speak for $25,500 and give the money to the company now. You may say well that is 15% of the $30,000; yes it is, but if a small business does not get the money in time they could go out of business because the government is so slow to pay on their contract. Going out of business is not a good thing and if it happens all the money invested and time to build the business is out the window.

Let us say you have a structured settlement and you cash out of the deal using the same type of company? They will get the structured settlement money each month istead of you, but you will have all the money up front minus a 10-15% discount on the total money you would have received. You can then use this money for whatever you want. Such as investing, buying a house or buying new car, plasma TV and other things humans want to make them happy. You see?

"Lance Winslow" - Online Think Tank forum board. If you have innovative thoughts and unique perspectives, come think with Lance;
www.WorldThinkTank.net/wttbbs/

 

Pre-Settlement Loans

Pre-settlement loans are exactly what the name implies – cash payments to plaintiffs given in anticipation of a favorable settlement. Pre-settlement loans fall under the ‘non recourse’ category of legal loans, meaning that the extender of the loan has no recourse to collection of the money in case the plaintiff’s case is not settled favorably.

Such loans are either paid in full before or during the lawsuit process or extended in monthly payments. This usually depends on the recipient’s convenience, though it is generally agreed that monthly payments allow for better financial management.

A plaintiff is eligible for a pre-settlement loan an official lawsuit has been filed to claim for damages incurred by the negligent acts of others, or if they have suffered injury or loss at the workplace during the course of employment.

They are also extended when the case involves a matter of wrongful death, or when a person's death is caused by the negligent or intentional act of a wrongdoer. In such cases, the plaintiff holds a certain person, corporate body or government entity responsible for the death of another. Close relatives of the deceased, sometimes under constrained financial circumstances, may launch wrongful death cases. In such cases, a pre-settlement loan can make all the difference.

Financers who extend pre settlement loans bank on the plaintiff’s case being settled before the usual legal process is complete. If the case is open-and-shut or unlikely to be resolved in the defendant’s favor, the defendant’s lawyer will advise for ‘settlement’ – meaning that time and money is saved on a foregone conclusion. When this happens, pre-settlement loans are recovered with interest.

It is advisable that a plaintiff shops around for the best possible interest rates on pre-settlement loans (or any other kind of legal financing), since these vary from financier to financier. It is a very bad idea to accept the first offer that comes along.

Settlement Loans provides detailed information on Settlement Loans, Lawsuit Cash Advance Loans, Lawsuit Settlement Loans, Pre-Settlement Loans and more. Settlement Loans is affiliated with Lawsuit Loan Companies.

Friday, May 26, 2006 

The Advantages and Disadvantages of Structured Settlements

by Caroline Smith

A structured settlement is an arrangement where instead of a lump sum of cash being awarded to a claimant, a tax-free periodic payment is agreed. Structured settlements are often used in guardianship cases, workers compensation cases, wrongful death cases and severe injury cases. Research has indicated that the more severe the injury, the more likely it will be that a structured settlement will be used.

The first thing that you may be asking yourself is, what are the advantages of taking a structured settlement over a cash settlement? The first reason is that it offers long-term financial security and protection to the plaintiff. It has been estimated that 90% of all large cash awards are spent within 5 years due to poor financial management skills.

The main advantage of structured settlements is the tax-free status of the payments and capital growth. For an example, let us suppose that a claimant has been awarded a settlement and can either take a $1 million lump sum, or $2 million spread over their lifetime. If they opt for the $1 million, although the sum itself is tax-free, any interest earned on it will be liable to income tax. However, the $2 million paid over their lifetime will not be liable to income tax.

One of the disadvantages associated with structured settlements is the perceived inflexibility of its structure. It is not possible, for example, to add your spouse's name to the settlement agreement without the exception of a court order. If the claimant is risk averse, they may believe that they can create a higher yield by investing the money themselves. However, it can also be argued that the monthly payments of the settlement give the investor a great way to "dollar cost average" their investments.

If you are awarded a structured settlement, there are companies that give you the option to sell structured settlement payments for a lump sum cash fee. In this situation, you should always seek the advice of a trusted attorney. In recent years, this type of transaction has become increasingly popular and has resulted in more than 35 states and the federal government increasing consumer protection statutes and setting in place strict rules and regulations for these types of transactions.

Caroline Smith is a regular contributor to SettlementsCash.com - An online resource providing information on
structured settlements including life settlements and cash for structured settlement payments.

Wednesday, May 24, 2006 

Benefits Of Settlement Loans

Settlement loans are, generally speaking, highly advantageous to their recipients. Modern legal processes can be extremely time-consuming, and the period it takes to settle a claim can last longer than the claimant’s paying capabilities. By having this kind of finance, a claimant is free from the temptation to settle early and for a lesser-than-hoped-for amount.

Obtaining a settlement loans is usually a speedy process, because the financier generally does not require any other collateral besides the eventual settling of the claimant’s claim. The scales of advantage weight heavily towards the loan recipient, because the lender cannot ask for repayment if the claim is not settled. Many lending institutions compensate for this with a heavy interest rate, but the borrower can shop around for the best offer.

Settlement loans do not have to be qualified by a credit or employment requirement. Nor are there any up-front fees or processing charges involved. Such loans are a literal lifeline to financially beleaguered claimants who must bide their time until their claims are favorably settled. Settlement loans enable them to cover the costs of daily living, legal expenses, medical bills, professional maintenance costs, investigator’s charges, etc.

Financing firms have become very competitive in priding settlement loans and vie with each other for customers. This translates into increasingly favorable terms of interest. In addition, there is an increased flexibility in the provision of settlement loans, meaning they can be distributed over a period of time or a single up-front payment. Courts now require attorneys to inform financially constrained clients about the availability of such loans.

Settlement Loans provides detailed information on Settlement Loans, Lawsuit Cash Advance Loans, Lawsuit Settlement Loans, Pre-Settlement Loans and more. Settlement Loans is affiliated with Lawsuit Loan Companies.

Monday, May 22, 2006 

Who Should Use Structured Settlements?

From a company that symbolizes significant longevity and premier leadership in the structured settlement industry, you can count on us to get you the results you want from our highly creative, responsive, and professional staffƒa staff that is backed by the best systems in the business and with access to the largest group of annuity providers available.

What are Structured Settlements?


Structured Settlements are most often used to resolve personal physical injury claims or lawsuits by establishing a stream of periodic payments that are funded by annuities provided by highly-rated life insurance companies. If a structured settlement is used to fund a personal physical injury claim, it provides the payments tax-free. A structured settlement can be used to settle non-personal injury claims too.


Who Should Use Structured Settlements?
One or more of the following criteria might be used to determine if structured settlements are appropriate for your personal injury situation:

The loss amount is greater than $10,000 and there is an opportunity to defer some of the payments for three or more years.

There is involvement of a minor child and a loss of $5,000 or more.


The injured party has a desire for the security and peace of mind gained from receiving a steady stream of income from a structured settlement over a long period.

The injured party has little experience and discomfort with managing large sums of money all at once, much less over time.

The injured party wants to shelter the settlement monies from future taxation on the earnings.

The severity of the partyÍs injuries and future care needs will best be served by the periodic payments that can be gained by using a structured settlement.

http://www.epssettlements.com

Friday, May 19, 2006 

Viatical Settlement Companies

Death may be the only sure thing in life, and gambling on it may sound disconcerting to many.

Viatical settlements involve selling the life insurance policy of a terminally ill person to a company who pays a lump sum cash amount in return for the policy. The companies buy the policy at a reduced rate of the face value, sometimes as much as 50% of the face value, and then collect the death benefits after the person’s demise. Morbid as they may sound, but viatical settlements can provide relief to terminally ill people whose life expectancy has been predicted to about two years or so.

This is basically a high-risk transaction, as life itself is unpredictable. The viator (seller) may outlive the predicted life expectancy, and in this case, the company who buys the policy will stand to lose. The longer the person lives, the lower is the return value of the policy.

A terminally ill person may wish to sell his policy to raise cash to in order to ease the financial strains of his final days or to leave something for his children or grandchildren.

There are many private companies who purchase the life insurance policies. They, then become the beneficiaries on the demise of the original policyholder. Before selling the policy, ensure that you are selling to a funding company and not a broker company. This is because broker companies are not the actual buyers and they may or may not act in your best interests.

Also, the buyer companies have their own rules for buying the policies. They would run a checklist on your policy. For example, most companies prefer that a policyholder has had the policy for at least two years. They may also ask you to sign a release allowing them to access your medical records.

You should not accept payments on installments. As per New York State law, all funds must be received at the time of sale. Also, there should be no hidden fees involved at the time of sale.

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.

Thursday, May 18, 2006 

The Structured Settlement

What Is a Structured Settlement?

Sometimes when a plaintiff settles a case for a large sum of money, the defendant, the plaintiff's attorney, or a financial planner consulted in association with the settlement, will propose paying the settlement in installments over time rather than in a single lump sum. When a settlement is paid in this manner it is called a "structured settlement". Often the structured settlement will be created through the purchase of one or more annuities, which guarantee the future payments.

A structured settlement can provide for payment in pretty much any schedule the parties choose. For example, the settlement may be paid in annual installments over a number of years, or it may be paid in periodic lump sums every few years.

Benefits of a Structured Settlement

One significant advantage of a structured settlement is tax avoidance. With appropriate set-up, a structured settlement may significantly reduce the plaintiff's tax obligations as a result of the settlement, and may in some cases be tax-free.

A structured settlement can protect a plaintiff from having settlement funds dissipated, when they are necessary to pay for future care or needs. Sometimes a structured settlement can help protect a plaintiff from himself - some people simply aren't good with money, or can't say no to relatives who want to "share the wealth", and even a large settlement can be rapidly exhausted.

Minors may benefit from a structured settlement as well, such as a settlement which provides for certain costs during their youth, an additional disbursement to pay for college or other educational expenses, and then one or more disbursements in adulthood. An injured person who has long-term special needs may benefit from having periodic lump sums with which to purchase medical equipment or modified vehicles.

In some situations, it will be better for a severely disabled plaintiff to set up a special needs trust, rather than entering into a lump sum or structured settlement. Any plaintiff who is receiving, or expects to receive, Medicaid or other public assistance, or the guardian or conservator entering into a settlement on behalf of a disabled ward, should consult with a disabilities financial planner about their situation before choosing any particular settlement option or structure.

Potential Disadvantages of Structured Settlements

Some people who enter into structured settlements feel trapped by the periodic payments.

They may wish to purchase a new home, or other expensive item, yet be unable to muster the resources because they can't borrow against future payments under their settlement.

Some people will do better by accepting a lump sum settlement, and investing it themselves.

Many standard investments will give a greater long-term return than the annuities used in structured settlements.

Selling a Structured Settlement

If you have a structured settlement, you may have been approached by a company interested in purchasing your settlement, or may be curious about selling your settlement in return for a lump sum buyout. About two thirds of states have enacted laws which restict the sale of structured settlements, and tax-free structured settlements are also subject to federal restrictions on their sale to a third party. Also, some insurance companies will not assign or transfer annuities to third parties, to discourage the sale of structured settlements. As a consequence, depending upon where you live and the terms of your annuities, it may not be possible for you to sell your settlement.

Keep in mind that companies which buy structured settlements intend to profit from their purchase, and sometimes their offers may seem quite low. You may benefit from approaching more than one company in relation to the sale of your settlement, to make sure that you obtain the highest payoff. You also want to be sure that the company which wants to buy your settlement is established, well-funded, and reputable - you don't want a fly-by-night outfit to obtain the rights to your annuities but to disappear or go bankrupt before paying you the buyout money. You may have to go to court to get a judge to approve the buyout. It is usually a good idea to consult with a lawyer before entering into an agreement to sell your settlement.

Special Considerations

Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:

Excessive Commissions - Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.

Overstated Value - Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.

Self-Dealing - There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.

Life Expectancy - It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies - For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.


Additional Resources

Selling Your Structured Settlement - The costs and benefits of selling a structured settlement.
Cash Payment For Your Structured Settlement - What should you consider before selling your structured settlement?

Copyright © 2005 Aaron Larson. All rights reserved.

Wednesday, May 17, 2006 

Structured Insurance Settlements

If you are entitled to receive an insurance settlement, you can claim it either in a lump sum or as a structured insurance settlement. Both methods have their pros and cons.

In a structured settlement, you receive your benefits in a staggered manner. In other words, you would get the payment assigned to you over a certain time period. This method works if you would like to have access to funds at different stages of life and think you, individually, may not be able to wisely invest a lump sum amount. With a lump sum settlement, you are given all your claim money as a one-time payment. This method is good if you require your entire funds immediately or if you have a better investment plan than a structured settlement can provide.

It is important to note that not everyone is entitled to receive a structured settlement. They are accessible only to those who receive money because of a physical injury. Another aspect that one has to keep in mind is that in order to get structured insurance settlements, the awarded person should clearly state his or her desire for such settlement at the time of settlement agreement.

A structured settlement is a good way to receive tax – free payments spread over a period of time. When you are awarded a settlement you need not take the entire amount at the time of settlement, you do have a second option. You can set up a plan where in you are paid a limited amount of cash in the beginning with the remaining amount paid in installments over a decided time period. The future payments can be made monthly, quarterly, or yearly. By following this plan, you would be able to save a substantial amount of tax.

Generally, you can expect to save anything between 25% and 35% in state and federal taxes depending upon your state of residence and the nature of your settlement. However, to receive the tax break, by law you are required to “fix and determine” the structure of payment at the time of the settlement, which can not be altered at a later time.

Insurance Settlements provides detailed information on Insurance Settlements, Average Insurance Settlement Amounts, Insurance Settlement Loans, Auto Insurance Settlements and more. Insurance Settlements is affiliated with Corporate Life Insurance Settlements.

Tuesday, May 16, 2006 

The Lowdown On Getting Cash For A Structured Settlement Payment

It is possible for recipients of a structured settlement payment to sell a part of the amount for a lump sum that can be used for meeting some near-term expenses. The process of transferring one’s rights to a structured payment to another party for a sum is referred to as factoring. The first step should be to assess whether one is actually required to sell a structured settlement payment or an alternative is available. The amount of money available with these transactions is inversely proportional to the period of the settlement. It is important for a seller to be aware of the lowest value for which he is willing to sell his structured settlement payment.

The sale of a structured settlement has to be approved by a court. The approval depends upon the court’s assessment of an annuitant’s need for immediate cash, his capabilities in managing a substantial amount of money, and whether the interests of annuitant and his family will be served by a sale of annuities. If a structured settlement is sold without prior court approval, it attracts a federal excise tax of 40% on the amount sold.

There are various laws instituted by states across America for regulating the sale of a structured settlement and protecting the seller from unscrupulous buyers. Buyers are bound by law to disclose the amount that is transferred. This amount is compared against the amount made available to the seller. The interest rates charged by buyers have a significant impact on the actual amount received by an annuitant. Therefore, it is important to take the services of companies that offer to buy structured settlements at competitive rates and can design a solution to meet an individual’s requirements.

When comparing companies for carrying out such a transaction, it is worthwhile to compare their track records in terms of integrity, financial soundness, and reputation. Free quotes can be obtained from different companies, there are no obligations attached with these quotes. One can also take the services of a settlement broker who has the necessary experience in dealing with settlement purchasers.

George Hostetler recommends Structured Settlements Guide for more information on getting cash for a structured settlement.

Saturday, May 13, 2006 

The Life Settlement Process

Life Settlements, also commonly referred to, as Life Insurance Settlements are quickly becoming an exciting financial planning tool for seniors and the financial advisors who assist these seniors.

The initial process before determining if a settlement is available is meeting a few of the basic requirements. The types of insurance policies that can be considered for a life settlement are universal life, whole life, variable life, survivorship (any type), adjustable life, joint first to die, and term insurance (if convertible). It is also common practice for the insured to be over the age of 65.

The process begins with when the individual policyholder "cases" are submitted to a Life Settlement Broker or Company through a completed application and a HIPPA release form.
Policyholders will provide a current policy illustration, medical records, for the insured, as well as other documents that may be requested.


After a completed thorough evaluation of the policy, a potential life settlement value is determined for each individual case submitted. This evaluation includes a review of submitted medical records by an independent medical underwrite. A medical exam or physical is NOT required.

If the funding source is interested in purchasing the policy, an offer to purchase the policy is communicated to the policyholder's broker or financial advisor (Not all policies will qualify for a life settlement).

If the offer is accepted, closing documents are prepared and sent to the policy owner through their life settlement professional.

It is the policyholders chose if the want to accept or decline the offer. There is never any cost or obligation during the initial life settlement process. The settlement offer is determined on a case-by-case basis and evaluation of the policy is required before an offer can be made.

Life Settlement Pro is a Life Settlement Broker and provides detailed information about life insurance settlements, life settlements, senior life settlements, licensed Life Settlement Company and more. LifeSettlementPro.com offers free Life Settlement Evaluations.

Friday, May 12, 2006 

Structured Settlement – Definitions, Do's and Don'ts

What is a Structured Settlement? A Structured Settlement is a Settlement in which you receive “Structured” payments on a regular basis. In other words, it is a payment plan, in which, instead of getting a large lump sum, you receive smaller payments in increments. These increments go on weekly, monthly or yearly cycles. These settlements are often known as a win-win situation because the payer needs to come up with a lot less money up-front and the payee has a steady stream of income coming in at all times. This process can also be described as Annuity.

When are structured settlements used? Structured Settlements are often, but not limited to, these common situations:

1. Lottery Winnings – Often times, in the Lottery, you can opt to receive numerous smaller payments in exchange for a single larger payment.

2. Malpractice Cases – In situations where a family member is lost or left crippled due to medical malpractice, the party may be entitled to a structured settlement over the span of the victim’s life or as a grievance payment. These payments don’t fix things, however, they are meant to make living a little bit easier for the victims and families.

3. Insurance Cases – In many insurance cases, this form of settlement is used. This is because it is easier to make smaller payments over a longer period of time as well as the damage left behind may be better dealt with over time.

Understanding these concepts are important in the process of properly handling your income. It is important also to understand how money works over periods of time. Over long periods of time the value of the dollar is likely to decrease. This means if one was to receive, for example, $1000 a month for 20 years, that $1000 dollars could only be worth $500 at the end of the term. This is one reason some people decide to sell their structured settlement for a large lump sum.

One people decide to sell their structured settlement there are numerous reasons behind it. The first reason may be that, due to their immediate needs, they need a larger amount of money right away. A good example of this would be when buying a new car or home. Another reason people decide to sell is because they would like to invest it into something that gains equity over time and actually grows in value rather than decreases. Some people want to fight the cost of inflation and take the monthly payments and re-invest. This is the wiser choice of the two most of the time.

When selling your structured settlement or selling Annuity, it is almost always advised that you do your homework first. Don’t sell to the highest bidder right off the bat. Before hand you should read up on what your options are. Seek the help of a broker, a financial advisor and a legal professional first. By doing this, you can protect yourself from scam artist to defend yourself from transactions lacking in integrity. It is always smarter to take the safest route possible. Selling Annuity can be dangerous so it is always wise to make slow and steady steps.

Cash Structured Settlement
Sell Structured Settlement
Sell Annuity
Gage Killian writer, web-publisher

 

Why A Structured Settlement Payment Is So Popular

Structured settlement payments are becoming popular because of the advantages they offer over other forms of payments and investment options. The payments which are available in the form of annuities are tax-free at the state and federal levels. Moreover, the payments are secured by state and federal laws. The annuities can be invested in U.S Treasury Securities and other low-risk government insured options.

As against a structured settlement, a lump sum can be difficult to manage by an individual who will have to grapple with the complexities of financial investment and tax laws. Moreover, if the management of a lump sum amount is handed over to a third-party who turns out to be unscrupulous, the resulting loss can be very heavy. In contrast, with structured payments, the loss is usually of an amount due at a given time. Structured settlements offer flexibility and the payment cycle can be fixed according to the beneficiary’s convenience. Structured settlement payment schedules and amount are decided after carefully considering the beneficiary’s present financial condition, age, and responsibilities. The annuity money can be used to pay off a large bill upfront and the remaining money can be obtained over a period. People who meet with an accident and are unable to earn for themselves prefer a structured settlement payment that keeps the money coming in regularly. It allows them to plan for their future and the future of their near and dear ones.

The Federal tax code was amended in 1982 to allow for structural settlements; this was done so as to allow individuals better security with large sums of money. A major advantage of structured settlements is that they are adjusted for inflation so that their sum is greater than a lump sum payment for the same amount. The paying party, which is frequently an insurance company, also prefers structured settlement payments because the payments are bought upfront in the form of an annuity and the amount they pay is less than the sum received by the beneficiary. A defendant too favors a structured settlement as it saves him the cost of court expenses and stiff attorney fees. Thus, structured settlements are beneficial for all involved.
George Hostetler recommends Structured Settlements Guide for more information on selling a
structured settlement payment.

Wednesday, May 03, 2006 

Leave unwanted annuities behind

NEW YORK -- Much ink has been splashed lately over the high-pressure tactics being used by insurers and agents to foist annuities on older Americans who may not need them. Now there's a fast-rising secondary market for people looking to cash in annuities for a lump sum settlement.

Is this the perfect escape hatch for people locked into an annuity they don't want or yet another way for brokers to take advantage of seniors in dire financial straits?

With an annuity, the buyer pays an insurance company a sum in return for regular payouts over a defined period. With more and more people owning or inheriting annuities, you can bet more and more people find themselves in a situation where they want out.

Most annuities charge "surrender" penalties of up to 20 percent if you want to withdraw the principal before a set period has expired. The penalty generally decreases with time.

Those fees have drawn a rash of complaints in recent years, especially from seniors, said Jim Poolman, who chairs the National Association of Insurance Commissioners' life insurance committee.

Into this muddle has stepped J.G. Wentworth, a company that got its start buying structured payments from court awards and the like. It now has 70 percent of the market for annuity settlements.

The company offers anywhere from 7 percent to 11 percent below the annuity's total value as a lump sum, said Michael Vaughan, managing director of the company's annuity program.

Whether that is a good deal depends on the particulars of your situation, Vaughan said. He said his company offers people flexibility and perhaps a better deal than surrendering to the insurance company.

In other cases, it may be the only deal an annuity owner can get.

And whereas agents who sell annuities have an incentive, in the form of commission, to sell large policies, buying annuities for lump sums is the opposite. Agents collect a cut of the price -- Vaughan won't say how much -- so their incentive is to get clients the most money for their annuity.

Prices are set by J.G. Wentworth, not the agent, and the discount from the full value is prominently displayed, says Vaughan.

The market is new and growing and, Poolman says, no red flags have been raised about annuity settlements so far.

Still, annuities are complicated to begin with and selling yours can have significant tax implications. So do your homework. The cash may come easy but you don't want to make a bad situation worse.

http://www.mercurynews.com

About me

  • I'm The Structured Guy
  • From Mandeville, Manchester, Jamaica
  • A writer and web designer who has a profound interest in numerous topics and likes to share them with others
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