Structured Settlement: What It Is
A structured settlement is a nontaxable payment from health insurance companies. Personal injury victims get this over a period of time. It is a sequence of fixed payments that support these victims with medical expenses and basic financial requirements.
When Should You Sell It?
After a while, you may get tired of the little monthly payments that isn’t enough. Then you can sell it to get a big amount of money in return. The purpose to sell it will be different from people to people. Some people will choose to buy a new house while others may choose to buy a new station wagon.
Other causes might include like-
- Need to pay their kids’ college costs.
- To get rid of a debt.
- Investing in a good business or stock.
Who Will Buy?
There are many organizations that will purchase the structured settlements from you. It’s similar to an investment for them where they offer a lot of cash at first. Then they receive a sequence of payments with profit from it later.
How To Sell?
If you are 100% sure to sell it, then decide to do it soon. That’s the initial step. Later you can search for the place with low interest rate. A low interest rate will decrease your lump sum (agreed discount rate).
Selecting The Right Company
Usually, a company will propose you around 10-15% of discount rate. That’s only one of the reasons to consider. Go for the company that has skill and a trustworthy image.
What Will A Company Do?
It’s their responsibility to please a client. So they will ease up your process in a court of law for you. All you will have to do is fill-out a claim form, and stand before a judge in the conclusion to validate your need of money. Meanwhile you can sit back and keep calm while they confirm all the documents and do all the process.
If the judge approves your claim, you are all set to have what’s lawfully yours. Normally, it takes around 40 days to get you the cash.
One more important thing to remember is that the Tax Relief Act of 2001 declares that “the lump sum payment that a separate payment to meet accidental financial needs.” So, it is let off from tax.
Finally, when you get the cash, don’t over expense it. In its place, invest some of it in a decent bank. Because remember that Benjamin Franklin said, “A Penny Saved is a Penny Earned.”
Author: John Kane (@ your disposal in case you want to Sell Structured Settlement)