Based on a recent article on the secondary market for structured settlements, you already know that transferring your remaining structured payments to an insurer is perfectly legal. However, before you shop around for such an offer, if you’re selling your structured settlement yourself, involving your attorney or a dedicated, structured settlement specialist who specializes in these kinds of life situation is highly recommended. This is because selling these types of payments back to the company that was issued the settlement is considered a transaction between an investor and an insurance company. So, depending on the terms of the agreement, the insurance company itself will have to decide how much it’s willing to pay for your structured payment.
In case you didn’t know, there are two main companies that buy structured settlements. They are called, in order of desirability, Creditors A and Companies E. They are also the two most often times sued entities in connection with the annuity fraud. It’s important to realize that all these companies essentially operate on a premium commission structure. That means that they are essentially in the business of collecting premiums from people who wish to sell their structured settlements to them. And when you choose to sell your annuity to them, you’ll likely lose quite a bit of money. However, this doesn’t mean that you should immediately put your life savings on the line.
Let’s assume for a moment that you’ve decided to proceed with the sale of your structured settlements. After making your decision to sell, your first step should be contacting an experienced structured settlements broker. This professional can assist you in finding the perfect life insurance company to purchase your settlement and can also provide you with many details on the process. You’ll likely need to contact a personal injury attorney as well, particularly one that specializes in dealing with life insurance company underwriters.
In the case of structured settlements, it’s very important to remember that you aren’t actually selling the entire settlement itself. Instead, what you’re doing is selling some of the future annuity payments that will be received from the sale of the settlement to the life insurance company. It’s important to understand that your settlement can potentially earn you tens of thousands of dollars in interest payments over the next several years.
As you can see, selling your settlement proceeds to a life insurance company makes a lot of financial sense. If you’ve been awarded a settlement in the past, it’s highly likely that your tax court will deem it taxable income in the future. The IRS has been very consistent on the fact that interest on tax-exempt securities is only taxable if such securities are purchased and held for more than six months during the year. At the very least, if you hold onto your settlement for this long, the interest on your tax-exempt securities will be much higher than it would be if you sold them immediately. This makes selling Structured Settlement payments to a third party extremely profitable.
When you sell Structured Settlement payment rights to a broker or firm, you should be aware that the broker or firm will become involved in order to provide you with a true legal counsel. Although the broker or firm will do most of the work, you’ll need to remain involved in the transaction as well so that you can keep an eye on things and make sure that everything is proceeding as smoothly as possible. In the end, having York life insurance company pay you a lump sum in exchange for your structured settlement derivatives is one of the best financial decisions that anyone could ever make.