When you are injured and have to start receiving payments through a structured settlement, it is important that you find the right company to work with. There are many buyers of structured settlements out there, but not all of them are created equal.
This article will discuss how to choose the right structured settlement company for your needs.
Make Sure the Company Is Licensed and Insured
Any company you work with should be licensed and insured. This protects both you and the company in case something goes wrong. Make sure to ask for proof of licensing and insurance before signing anything.
If the company is unwilling to show you this information, it is best to move on. The last thing you want is for something to go wrong and not have any protection.
Check the Company’s Reputation
Look up reviews online or talk with other people who have used their services in person if possible. You can also contact the Better Business Bureau (BBB) and see how they rate companies that provide structured settlements.
The bureau will help determine which ones are reputable versus scams or fraudulent businesses seeking only profits without providing good service quality.
Make Sure the Company Offers Competitive Rates and Fees
When looking for a structured settlement company, you want to ensure that it offers competitive rates and fees. Compare what different companies are charging to get an idea of what is fair.
You should also ask about any other hidden costs that may come up down the road. By being upfront about all potential costs, both parties can be clear on what to expect.
The Company Should Have a Long History of Successful Settlements
It is important to find a company with a long history of successful settlements. This means it has the experience and know-how to help you through the process.
An inexperienced or unprofessional company may not be able to do as good of a job, which could end up costing you more in the long run. Do your research and make sure you are comfortable with who you choose to work with.
Make Sure the Company Offers a Variety of Services
By finding a company that offers a variety of services, you can be sure that the company will take care of everything for you. This will make the process much easier for you and save you time and hassle.
Some companies may only provide certain services, such as helping you set up the payments or transferring the money. Others may be more comprehensive and offer a wide range of services, including investment advice, tax assistance, and more.
The Company Should Have a Good Relationship with the Courts
A good relationship with the courts is important, as it will be involved in the process. The company should provide you with references from past clients who have worked with the court system.
This will show that the company is familiar with how everything works and help guide you through the process. If there are any problems or delays, they will help resolve them quickly.
Make Sure the Company has the Ability to Transfer Funds
The company should have a way to transfer funds, such as through an escrow account or another method. This will allow you to access the money when you need it easily.
Some companies may not have a way for you to get your funds right away, which could cause delays in getting what you need. Make sure to ask about this ahead of time so there are no surprises.
By following these tips, you should find the right structured settlement company for your needs. Do your research and take your time in making a decision, and you will be sure to find one that can help you through the process.
What is a Structured Settlement?
In 1982, the U.S. Congress passed the Periodic Payment Settlement Act. This piece of legislation was designed to protect a plaintiff from depleting their cash sum award from a personal injury or wrongful death lawsuit too quickly. It was also meant to prevent the plaintiff from going on public assistance because they spent all their money from the award. The Periodic Payment Settlement Act helped to establish a stream of income for a specified time or the life of the plaintiff. This legislation changed the tax code by making these payments tax-free under most circumstances.
Before 1982, a court settlement was typically paid in one lump sum. A claimant would often spend all the money, yet they were still injured and could not work. They would often have to go on public assistance until they were able to go back to work.
At some point during the 1970s, insurance companies saw an opportunity to set up structured settlement payments to individuals who won large cash payouts from their lawsuits. They argued that lump-sum settlements are tax-exempt, so structured settlements should also be tax-exempt. Insurance companies used annuities as a vehicle to set up structured settlement payments.
How does it work?
When a plaintiff wins or settles a lawsuit against a defendant, a licensed structured settlement consultant will work with the plaintiff to purchase an annuity from a life insurance company. The consultant and plaintiff need to choose a highly-rated life insurance company because that company will be managing the annuity. The plaintiff can negotiate the terms of the payments such as:
- When the payments begin
- The frequency of the payments
- The dollar amount of the payments
- The length of the term of the payments
What is an annuity?
An annuity is an insurance product that is often used by retirees who need a steady source of cash flow during retirement. An annuity can be funded with periodic payments or with one lump sum of money. There are different types of annuities, which include immediate pay fixed or variable income annuities and deferred pay fixed or variable income annuities. The plaintiff will need to decide which type of annuity is best for their situation.
Types of cases that result in structured settlements
Many types of lawsuits can result in a lump sum cash payment. Court cases that typically result in structured settlements include:
- Personal injury cases – A person can file a lawsuit for injuries they believed were caused by another person or business. A structured settlement can help pay for medical costs and lost wages.
- Medical malpractice – An injured patient or the family of a deceased patient can sue if they believe they were harmed by a doctor.
- Workers’ compensation – This is a type of structured settlement that provides compensation to an employee who is unable to work due to a workplace injury. It pays for medical costs and lost wages.
- Wrongful death – When a family claims that their loved one is a victim of wrongful death, they can seek compensation to replace the income of their loved one.