So after the accident you are now ready to begin filing an insurance claim. Lets say it was a routine accident where you were not found at fault. As a result of the injury you saw a doctor for a soft tissue injury, described as bruising, ligament damage or tears and strains to the muscle tissue. As a result of the accident you missed work for a week. Before clearing you medically you saw a doctor over a four week period a total of three times. This is the basic accident that makes up most insurance settlement pain and suffering claims.

Suppose your total medical bills came to $500 dollars. As a result of missing work you can show you lost $1,000 dollars of income. So the total opportunity cost + actual medical bills comes to $1,500. This is a simple example which makes the multiplier method much easier to use for the case of determining value. How come? People who handle these cases on a regular basis are familiar with the situation and recognize the relative accuracy quickly.

How do you determine the value of the personal injury? you need to take your final number from the previous example. And then go ahead and multiply that by three. $1,500 times 3 (the multiplier) = $4,500. In a normal situation where there was no extreme damage or long lasting affects of the injury your pain and suffering settlement would value $4,500 roughly. This is separate from the cost of damages for property including both automobile property and actual physical property like a home or business.

To assess where you should start in your initial negotiations take the $4,500. And multiply that by 2, to account for other incidentals giving you a value after factoring damages to the property of $9,000.

Negotiating the insurance company can be complicated and is much like trying to bargain for something. You and the insurance company each have a rough idea for the value of your pain and suffering. The next step in the series is to come to a mutual agreement on what that value is.

Step 1

Use the national average of 19.2%, but some companies offer less of a discount rate. The lower the number the more money you get for your settlement. The lowest rate I have seen used recently in a structured settlement calculator is 8.4%

Created by- Purchase Structured Settlements

Step 2

Select the term that you are receiving payments typically monthly or annually but if you get them on an irregular basis you can combine them to get a rough idea. If you receive payments each quarter, for a pain and suffering settlement, just total those up for the year – multiply your quarterly amount by 4 and the is an annual number you can use in the calculator.

Step 3

Identify the next payment date, or the next time you are scheduled to receive income from the structured settlement.

Step 4

How much is each payment coming to you for.  This should be the standard amount that you are receiving as the guaranteed amount in each settlement check or deposit.

Step 5

The amount of payments remaining.  Depending on the company that originally structured your annuity you should receive statements on a regular basis that identify the current amount paid as well as the remaining amount of payments.

Step 6

Some structured settlements are structured in a way that allow you to receive increases every x amount of years.  This is usually a percentage. You will then need to enter the amount and the next time you are scheduled to receive an increase.

If you know how much your settlement is worth it will make it a lot easier to negotiate for the highest amount possible and because most of us are not annuity experts it gives you an idea of what to expect so you are not taken advantage of in the end.  You can sell any type of structured settlement, an annuity or a pain and suffering settlement.  The type is not important and no companies should even care what the settlement was awarded for.  You would be better off just not telling them.

The more educated you are on the process of selling and what they plan to do with your annuity the better position you will be in to get the most from the sale of the annuity. The industry as a whole has a lot of predatory lenders in who are looking to take advantage of those with annuities who may find themselves in a bad spot financially. The more desperate you appear to the annuities companies during the sale the less money you will be paid and the more pressure will be applied to get you to sell.

Companies That Will Buy Your Annuity

JG Wentworth – we have all seen the commercials typically identified by the tag lines, ‘It’s your money, use it when you need it!’ They also have the commercials with people singing in opera, or the ones where the baseball players are discussing annuities. In the end JG Wentworth can be an easy and convenient option for selling the annuity.

Peach Tree Financial – Until recently Peach Tree didn’t run any type of commercial campaigns. Now they are heavily promoting their website ‘Settlement Funding.’ Peach Tree is another great option for obtaining a quote and gathering information on the annuity sale process. However, you never need to feel committed to using one company or the other. Remember that you hold the power and can sell the annuity to whomever you choose.

Woodbridge Financial – This company advertises heavily on websites much like this one to attract customers and have them fill out lead generation forms. Since 1993 they have purchase almost 1 Billion dollars in settlements from people looking for companies that buy structured settlements. Is that a large number? I have no idea, great companies are not measure in volume but results.

It is really important that you decide whether or not you really want to sell your annuity and get rid of your payments monthly. Once the annuity company has it, its’ gone there is no getting it back.

If this is the case then your life insurance settlement options are many.  You can sell the rights to an investor making them the beneficiary, then when you pass, she/he is entitled to the payout from the policy.  So if you have a $500,000 policy and want to sell your life insurance policy, you could do that in exchange for a percentage, say you were paid $200,000 then the remaining $300,000 would go to the investor.  This allows you to benefit from a policy that will eventually pay out in structured payments, but after you have died.   Why not use the money now?

If you are going to go this route there will be a claim settlement in life insurance agreement made where the paper work is finalized signing over the beneficiary amounts to the new investor.  If there is not proper steps taken and you are not educated from the beginning there will certainly be a senior life insurance lawsuit that can follow.

What are the risks to making such an arrangement?  Honestly there are not very many, unless you have a wife or children dependent on you for income, or need you to take care of their financial needs once you are gone.  If this is the case, spending the money in your policy now will leave them with nothing when that time comes.

If you are going to get a senior life insurance policy you need to know what they will require in order to buy it from you:

The life insurance policy must be worth $20,000 or more.

There is a limited life expectancy of the insured.

There are no existing liens on the policy.

If you meet these requirements and are ready to begin looking for investors to sell your life insurance policy to, you can evaluate most of those companies on-line.

The structured settlement will be given an amount as part of the judges ruling at the end of the case. He is responsible for making sure you are given a fair amount and that the insurance company or whoever is being held liable is not assessed a burden beyond what it would take to make restitution. The structured settlement will have details like pay frequency and total amount over time that you will need to consider, this is why it helps to have a certified structured settlement consultant.

So is the consultant really certified to do anything, and if so what? A structured settlement consultant is certified in their field of practice, either an accountant, financial planner or lawyer, but there is no certification per se for them that sets them apart as a specialist in structured settlements. There are many requirements however when it comes to filing the settlement and there will be proceedings after to ensure the funds are properly distributed. The reason it is so important to have someone on your side as a consultant is that the terms of a structured settlement are only assigned once, and cannot be re-negotiated after the fact.

A structured settlement broker is someone you can talk to after you have been receiving payments for a period of time and you are looking to sell structured settlement in exchange for a large lump sum payment now, and get settlement cash structured for flow. The broker will negotiate with you the terms or the amount for which they want to buy the settlement, and the amount they will pay you in up-front cash. Having a certified structured settlement consultant on your side during the trial will make it easier for you to consult that same individual should you choose to sell the settlement, or if you need structured settlement loans to help you during the trial. This is in your advantage because they are familiar with the amount you settled for, and can make sure you get them most from the sale of the settlement.

If you are looking to get cash for structured settlement payments there are plenty of structured settlement companies that will want to talk to you. They have the ability to buy the future settlement payments from you and give you a large lump sum settlement in return. When you purchase structured settlements payments you can sell all or portions of the payment. Meaning you can choose to sell only certain years of the payments, ie/years 10 through 15 and then receive the payments again after year 15.

The risk in doing this is that you may not be aware of a future condition brought on by the accident. For example if you develop medical complications after a few years, say really extreme back pain, but if you have sold the structured payments you will no longer have the extra cash to meet such demands. We should mention that if you were injured in any type of accident you should seek representation that specializes in that field like a train accident attorney for example.  However most people look to sell structured settlement payments because they feel they can do more with the money now than they can with payments over time, its often best to consult a certified structured settlement consultant for these very reasons. If this is the case for you, or if you are in huge debt and are losing a lot of money in interest than you may want to consider finding a company that buys structured settlements in order to discuss the possibility of selling yours.

Before you begin that process it will be really important for you to find a lawyer or financial adviser that can help you make the most of the settlement payments, you may even be able to get a structured settlement loans set up to help you during the trial. There are laws in place that actually prevent people, or at least try to prevent them from selling the settlement, because they don’t want you to be tempted into doing something that may look good now but that is not in your best interest over time.

A structure settlement is a financial arrangement made for someone to pay someone else a large sum of money over time rather than paying them all at once.  It is most used to satisfy lawsuits or prevent lawsuits from going to court by making an “undisclosed” settlement amount.  They are also used to fund lottery winnings because the city or group of cities offering the lottery rarely has all the funds ready to just fork out on any given day.  So they arrangement settlement funding through an annuity.

If you are the recipient of one such settlement or annuity arrangement you are aware that the payments come to you on a regular basis.  The intervals may be once a month, once a quarter or once a year but they come regularly.  You may also be looking to sell the structured settlement in exchange for a lump sum of cash now.  This could be advantageous for you if you have looming bills you are unable to pay, even with the monthly settlements, or you may have a great opportunity to invest in say a home or stocks.  If this is the case than you may benefit from an annuity cash out or settlement cash structured for flow.

Buy Settlements

There are companies out there that will buy your settlement from you, they can even buy structured settlements online.  They are interested in the settlement because it represents a consistent income stream that they can expect a consistent income from.  However, very rarely will they actually hold your settlement for a long period of time.  They will negotiate a price with you for significantly less than the total amount you have remaining to be paid to you, then, they package the annuity into another type of bond and sell it to private investors.  If the company is good at what it does it will make anywhere between 10% and 20% off the transaction.  You can also consult a certified structured settlement consultant to help you make the best choices for the settlement.

An annuity and a settlement are very closely related.  The settlement is the name for the annuity funding your payments.  So you receive a settlement that is actually funded by an annuity, so if someone wants to buy my annuity they are essentially buying the investment that is funding the settlement I won.

These future payments are arranged to pay out in whatever way best suits the one receiving them, this person is often called the plaintiff.  For example when my father was awarded a pain and suffering settlement for mal-practice he set the funds up in a structured settlement for my sister and I.  We each received a portion of the annuity on our 18^th, 19^th, 20^th and 21^st birthday – then on our 25^th birthdays we received a final lump sum.  That just happened to be how our father set up the payment schedule.

Among the primary benefits in a structured settlement is the tax advantage it provides as the payouts cannot be taxed in most cases; and can have tax deferments available to the plaintiff that wouldn’t normally be available.  A structured settlement can assist the individual receiving them by preventing funds from being prematurely used.  The settlement actually prevents the one receiving it from themselves by making sure the funds come incrementally.  This is especially true for minors who may be receiving an inheritance.  Because the maturity is not there in many minors the structure allows them to grow and mature within the reception of the funds.  It can be very helpful to have a certified structured settlement consultant helping you make these kinds of decisions.

In some situations a disabled plaintiff may be better served receiving payments over time or in a special needs trust in order to facilitate the purchase of medical expenses that may arise in the future as a result of the injury.  This way one is protected against spending all the money in the first few years only to find out later on that you need follow-up medical care.

Whatever the case may be a structured settlement is designed to disperse a large sum of money over a period of time to a specified individual often times settlement cash structured for flow is used to help pay bills and cover expenses.

Overly Aggressive Commissions – Annuities are a major income earner for insurance companies; because while many people pay into the pot, not many actually receive them.  Often times there are large commission percentages associated with these annuities.  Make sure the amount of commission paid out is NOT way higher than the principle amount paid out.

Inflated Value – After negotiating the settlement figure in a particular case the defense will state the value of the settlement as more than its real value.  In the end the plaintiff, by accepting the settlements in reality receives a much lower dollar value than was initially stated.  Some defendants have paid the full value of the settlement while at the same time knowing they would obtain huge rebates later from the annuity company they used.  Plaintiffs should definitely take the value of the settlement to a variety of insurance companies to compare the commissions and fees charged and in this way they can make sure they are receiving an equal value.  It may also be a good idea to structure the settlement so that any rebates received by the defendant are made payable to the plaintiff.

Double Dipping – This is a common term used in many industries to refer to people who are involved financially in both sides of a deal.  For example if your lawyer is also involved in insurance annuities he would be inclined to set up arrangements that benefit him more than the plaintiff.  Or, if the lawyer is setting up your annuity and then buying the insurance settlement from his own company.

Another form of double dipping would be when the lawyer setting up the settlement refers your annuity purchase to a particular financial planner, who in turn pays the lawyer a referral ‘bonus.’  Make certain you are aware what financial interest if any your attorney has in relation to the financial institution supplying the annuity.

Remaining Life Duration – As a result of the injury a person’s life expectancy may be significantly lowered.  It is important to consider this when you are evaluating a structured settlement and to be aware of the conditions of the settlement.  If the payments terminate upon death of the one who was awarded the settlement than the actual amount paid out may not be in proportion to what is owed.  Often times it will make more sense to make sure the settlement states a certain amount of payments be made or that an entire balance will be paid out rather than just until death of the plaintiff.

You must always consult with a tax professional if you plan to sell or buy structured settlements.  Don’t mess around with the IRS, they will hunt you down for the rest of your life.

If you receive incremental payments you are trapped with the interest rates set forth in whatever annuity plan the settlement was structured with.  If you are adept at investing and have other assets you can monetize you could potentially be better off investing the money yourself.  In fact, most standard investments will give a greater long-term return than the annuities paid in the settlement which is why it is important to have a certified structured settlement consultant on your side helping you make the best choice.

Supposing you are the recipient of a structured settlement, you are considered the owner of that settlement.  There is a high chance you have had the opportunity either directly or indirectly about selling or getting cash now for that settlement, maybe you have even asked one of them to “buy my annuity,” in exchange for a lump sum.  This is a pretty simple concept; you sell your future payments in order to receive a cash payment now.  There are several states, about two thirds, which have enacted laws restricting the sale of structured settlements.  Tax-free structured settlements are affected by federal restrictions as well.

Some insurance companies prevent the sale of structured settlements by preventing the transfer to a third party.  As a result, depending on where you live and the terms set forth in the original agreement it may not be possible for you to sell your structured settlement.

It is important to remember the companies that buy structured settlements plan to make a profit on their purchase, after all they aren’t running a charity.  In basic terms they MUST offer you less up front to pay your cash settlement than you actually have coming to you.  If you have a total of $25,000 coming over the next 5 years they may only offer you $15,000 now.  That way they can turn a profit on their purchase.  If you are in a situation where you need to sell a structured settlement you will be best served to compare the value of your settlement by presenting it to a few different companies.  Make sure in that comparison you find companies that are well funded and established.  Even though it may be expensive initially it is definitely in your best interest to approach a lawyer before entering into an agreement to sell your settlement.  You may also qualify for structured settlement loans which can help you pay bills while you are waiting for the settlement to be finalized.