Structured Settlement Companies, Brokers, Buyers, How do they work, Pros, Cons And Everything You Need To Know

What is structured settlement?

We are all prone to accidents, maybe you get some bruises, an injury or something worse could also be on the list. Now if you make a claim of say $3000, you might not get the full amount, there are variables, tax deduction and other causes which can all account to something even less that cannot cover all your expenses. Structured settlement is a simple solution to this.

For example, you got in an accident, and the other party or insurance company agrees to pay you, say $3000, in that case you can opt for structured settlement. As a victim, you sign a contract with the other party or insurance company for a term, which will be decided by you, to get the payment. This structured settlement payment ensures that you get that amount (in this case, $3000) tax free.

How do Structured Settlements Work?

This part is a bit difficult to deal with. The mechanics for a structured settlement works more like a dmv license process, you have to give the test, then qualify and you get the license. In a structured settlement the annual policies and tax benefits doesn’t work. The payment works in a more elaborate fashion. The defendant party will pay a life insurance company’s subsidiary company, a company assigned the task to pay you. The subsidiary company will buy the annual policy from it’s  parent life insurance company and keep the holdings to pay you as per the contract.

Structured Settlement
Structured Settlement

Structured Settlement Brokers and Buyers

Below is the list of best 10 structured settlement brokers and buyers:-

Settlement Broker Website Location
Fairfield Funding Atlanta, Georgia
J.G. Wentworth Radnor, Pennsylvania
Peachtree financial solutions Radnor, Pennsylvania
Olive Branch Funding Las Vegas, Nevada
Seneca One Bethesda, Maryland
Annuity Transfers LTD. Richardson, Texas
Oasis Legal Finance Rosemont, Illinois
Woodbridge Structured Funding Boca Raton, Florida
Stone Street Capital Bethesda, Maryland
CBC Settlement Funding Wilmington, Delware

 How to Evaluate and find the best structured settlement company?

  • Check which all companies are registered and accredited by consumer affairs.
  • Someone pressurizing you is a sign of red flag. Usually a good broker or company will take out time to explain you the process.
  • It is always good to consult someone before choosing a company. It could either be a friend, relative or any person who has chosen that company before. Ask for reviews and their experience with them. Usually maximum of 3-5 reviews should give you a red or green signal. See if you can get the contact details of company’s representative/employee who is going to help you in long run as well. Getting a direct contact of representative is highly recommendable to make sure all your queries are answered along the way and also the person is one call away when you are in dilemma.
  • Structured settlement purchasing firms should not charge for a quote and should be free rather. No matter how big the firm is, remember this.
  • One final recommendation from our side is to choose a person who is experienced if not vastly experience of working both in structured settlements and annuities.

Structured Settlement Pros and Cons

Pros of Structured Settlement are –

  • Tax Saving : A properly well constructed structured-settlement can help in tax avoidance (or may be tax free).
  • Future periodic payments : Structured-settlements offers guarantee for upcoming future payments at a regular time interval which may go up to tens of years.
  • Combination with Lump Sum Payment : Structured settlement can also be combined with Lump sum payment to cover immediate-expenses for an example – medical bills.
  • Protection : In most of the states, the annuities are often protected by the state insurance rules and laws which can guarantee all the obligations for an insurer that it will be covered.

Cons of Structured Settlement are –

  • Liquidity : If the settlement-amount got locked in Structured settlement annuity, then it would be quite difficult to achieve any kind of unanticipated-liquidity requirements which may arise in the interim.
  • Taxation : Certain parts of your Structured settlements can be taxed for example attorney’s payment.
  • Insolvency : Rare chance, but there is certain amount of chance that structured settlement company itself becoming insolvent.

Structured Settlement Vs Lump Sum Payment

The main advantage getting a lump sum payment is that you can have access to all your money which are entitled to you right away as you wish. The problem arises when you spend that money quite quickly which can be devastating in life later on when you are not left with any job.

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