News and Tips on structured settlement transfers.

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Should I Invest in Structured Settlements?

You may be frustrated at the generally low interest rates being paid on most conventional investments, and are looking for something else.

The structured settlement industry had a great year in 2010.  If you’re looking for a huge rate of return, purchasing structured settlements might be a way to make your money work harder for you.

Structured settlements take many forms, from personal injury lawsuits to lottery awards.  But the basic premise remains the same:  A lump sum is placed with an insurance company, who invests the money so that it will earn enough interest to make a fixed stream of payments at some time in the future.  Lawsuit defendants love structured settlements because it allows them to set aside less than the court-ordered settlement amount, and also gets rid of the responsibility of managing the money and the payments.

For the annuitant, the chief benefit of a structured settlement is the peace of mind in knowing that a steady stream of income will be coming their way. 

However, because of impending foreclosure, medical expenses, or some other reason, an annuitant may decide he no longer wants to wait for his money, and he wants to sell.  If you’d like to get in on that action, what should you do?

Have some cash.  You’ll need a stockpile of cash in order to pay the annuitants for their payment streams up front.  If you don’t have the cash available, you’ll need a good financing arrangement that will allow you to get it when needed, and creditors who understand the business of structured settlements.

Know the Law.  All states have laws governing the sale of structured settlements, designed to protect the annuitant from charlatans who would purchase his annuity too cheaply.  If you’re serious about buying annuities, you’ll need a good lawyer with an understanding of the process in your state.  Realize that sellers of annuities are encouraged to get legal and/or financial advice, so if you try to take advantage of a potential seller, you might wind up empty-handed.  Even if the seller signs off, a judge can always nix the deal if you’re trying to get too much for too little.

Discount Rate.  And that brings us to the discount rate.  Structured settlement buyers (that’s you) discount the total amount of the payment stream in order to determine how much you’ll pay the seller.  While this rate is often in the double digits, don’t think you can set any rate with impunity and expect the seller to accept it because he is desperate.  Even if he does, the court can reject your offer.

Know the Players.  A site like QuoteMeAPrice gives you a great forum to shop your best deal to prospective buyers.  But understand that you may have to float a better deal to get past some of the big players in this market.  There are big names and they have big reputations; even though there are complaints against them, sellers have heard of them, and that name recognition is huge.  So, you may have to make better offers that aren’t profitable just to get noticed.

If you need help selling your structured settlement, annuity or lottery payments,
contact us today. We are here to answer your questions and help you obtain the
highest possible price for your payments.

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