All about Structured Settlement Plans

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Structured settlements are some of the most popular forms of annuities in America. These settlements can be of various types, including lawsuit settlement, lottery winnings, investment annuities etc.

Lawsuits for example are an extremely common condition for creating a structured payment plan or annuity. Each year, thousands of lawsuits, especially personal injury cases, are filed across America. Over 90% of these end up in an out of court settlement between the two parties. In many cases, these settlements run to millions of dollars. The majority of defendants find it impossible to hand over such huge amounts as a lump sum. Rather, the two sets of attorneys usually negotiate and come up with a payment plan in which part of the damages are paid up front and the remaining amount handed over in the form of regular monthly deposits over a specified period of time. Typically, the plaintiffs will thus continue to receive a steady sum of money for several years after the lawsuit.

Many state lotteries also make use of structured settlements in paying the winners of their contests. However, is often happens that recipients of such structured payment plans need a way to sell structured settlement for a lump sum of money. This can be due to a variety of reasons: they might suddenly need a significant sum of money for a major purchase or due to some financial emergency, or is could be that they simply prefer the latter option.

In such case, there are several methods by which the owners can sell structured settlement plans for a mutually agreed upon amount. For example, most insurance companies and investment firms are on the lookout for such structured payment plans. Usually, they offer the original owners a sum roughly equivalent to the present day value money in exchange for a transfer of ownership of future funds that will be received by way of the settlement agreement. The sale is usually handled by a specialized structured payment or annuity broker who tries to negotiate a mutually satisfactory deal between the two parties involved. It is also best to hire a professional settlement broker for such negotiations since it involves careful consideration of multiple factors in order to make sure of fair dealings for both the buyers as well as the sellers. Once in the hands of an investment firm, these settlements are often resold to interested investors as annuities.