In its most basic form structured annuities are where you make a lump sum investment at a certain period of time and the investment pays you back a predetermined amount over time. Money used to go into the annuity and payments made to it happens during accumulation phase. When the annuity switches and begins to pay you out over time this is called the payment phase. So far so good?

Here is how to buy structured annuities;

1. Start looking around for all the various companies who sell structured annuities. These can be insurance companies, banks, brokerages houses, even non-profit organizations can sell them to you. The more companies competing for your business the better rates you will be able to lock down.
2. Study and learn the differences between annuity types. Saying it is an annuity is much different than actually understanding what that annuity does and the different pros and cons from each different type.
3. Make a decision on what is best for your individual financial situation and choose an annuity type that best fits your financial position. Guaranteed annuities can guarantee different things, they can secure a fixed amount each month or they can refer to a guaranteed number of months you will receive ‘a payment’ of some monetary amount.
4. You can also choose between an immediate payout or a deferred payout. There are different tax implications in each case. Deferred means you pay taxes at the time of withdrawal and immediate means you pay taxes at the time the annuity begins to pay you and on each payment thereafter.
5. Be aware there are a NUMBER of penalties that can be accumulated over time for doing different things. There are penalties for ealy withdraw and for missed payments to name a few.

Fixed annuities have very little risk and are usually more easily accessible than say a CD (certified deposit) would be.  They are tax differed meaning you don’t pay tax on them year to year, but you will when you cash out.  Additionally the immediate fixed annuity is popular because it has a higher yield than other low risk investments like bonds, CD’s, treasuries or money market accounts.

Immediate fixed annuities start delivering monthly payments right away until the entire amount put it (the premium) and all the anticipated owed interest have been paid out.  A deferred annuity, as the name implies, is where the payments do not come to you until the annuity has passed its maturation date earning more interest because more money is in the account accruing it, rather than paying it out to you over each months time.  If you have an annuity like this and you want cash for annuity payments you will need to discuss those terms with the financial adviser.

The fixed annuity also offers a payout over lifetime option which would enable you to defer payments received and have them paid out to you in a small amount but over your entire lifetime.  For a lot of people reaching the retirement age this is an attractive option because it insures you receive money each month until you pass on, but if you are thinking you may want to ‘sell my annuity‘ at a later date, this cannot be done.

The Benefits and Features of the Fixed Annuity Settlement

Single Premium – You are only asked to deposit money into one account, 1 time.

Rate Guaranteed – Most contracts will set a fixed rate to be paid on for the life of the annuity.

Minimal Risk – The only way you lose money is if the insurance company loses all of its money and your remaining payouts exceed what is covered by the FDIC.

Income For Retirement – Go into your golden years with the knowledge that you will be receiving secure monthly payments to live on. You won’t be able to execute an annuity cash out but you can live more secure knowing the payments will be there.

Returns on the Fixed Annuity of 3% to 10% – So you are getting a great return on the investment over time.

Life Insurance – An additional life insurance clause will allow your loved ones to continue to receive payments in the event that you die before the annuity is fully paid.

Many different companies will have different ways for selling an annuity you need to make sure you are aware of the annuity selling system they use so you can get the most from the investment.

Top 5 Things YOU NEED TO KNOW about Structured Settlement Cash Now:

1.  It is not legal in all states.

2. You will be offered much less than what the total sum of money is worth.

3. The company buying your settlement cash structured for flow is going to sell it again on the open market.

4. You CAN sell only portions of the settlement, years 5 to 10 for example, rather than the whole thing.

5.  Only exchange guaranteed money in the future for lump sum of cash now, if you absolutely have to.

Structured Annuities can only be bought and sold in certain stated under certain guidelines because the government mandates such actions to prevent predatory lenders from taking advantage of its citizens.  If you have a total annuity settlement worth $500,000 and it pays you $2,000 per month over 20 years you will most likely be offered 40% or so of the total value of the annuity.  So right around $200,000 lump sum cash in exchange for $2,000 per month.  You are losing $300,000.  So the only reason it would make sense to adjust your settlement cash structured for flow is if you can make better use of $200,000 now than you could with $2,000 per month over 20 years.

You can get $200,000 worth of home on a 15 year mortgage paying $2,000 a month, a home that after 15 years will be totally paid of and still increasing in value.  So with the annuity settlement you can have a nice home, paid off in 15 years while all your income goes to something else, living expenses, college education funds etc.  Only under rare circumstances would I exchange long term structured payments for short term cash now.

Sell Structured Settlement Insurance First Step

The very first thing you need to do before selling your settlement is to really understand what the settlement is.  The money you are being awarded each month comes, usually, from an annuity of some kind.  An annuity is a long term stream of consistent income.  Think for a moment about what kind of arrangements are ongoing and consistent.  Life insurance policies, home mortgages etc.  Knowing this will help you asses the value of your structured insurance settlement.  If the housing market is down in general your asset is worth more because it will come from higher rated mortgages.  This will help you negotiate a better price when you go and talk to a structure settlement company and ask them to “buy my annuity.”

This leads us to the second step when you sell structured insurance settlement; finding the right company to work with.  You will want to choose a company that has a lot of experience, 10 plus years of clean financial records with a long laundry list of previous and HAPPY customers.  You want a company that operates with great efficiency, meaning they can evaluate and process your position with accuracy – make sure they have strong marketing skills as this is how the sell your settlement on the open market (the better they can sell the more money they can get – the more money they can pay you.)

Decide how much of the settlement you want to sell because you can sell certain portions of it without selling the whole thing.  Your settlement will have been awarded a time period and you can sell different portions of it.  Unless you need to sell structured settlement loan, in which case you will need to contact an agency to see what your options are.

Be prepared for the turnover to take anywhere between four and six weeks from the time you finish signing the contract.  Each situation can be unique so it is important to be patient and set realistic expectations.  If you are more desperate you may be taken advantage of.

Lets take a second and think about why people cannot manage their funds following an annuity judgement.  The vast majority of settlements that go to a trial are work related accidents and car crashes.  Know lets take another to think about the type of people who would pursue the maximum winnings from such a case.  For a moment we will completely set aside the people who legitimately need the money to pay for medical costs and other damages.  Lets focus on the people who see dollar signs in their heads when they get a minor injury.

These people have not structured their financial situations in a way that will position them for greater success.  The reason they have dollar signs in their eyes is because they probably are in huge debt or are really coveting other peoples property.  So they are more prone to pursue more than what they deserve in a settlement case.  As time goes by they use the money not to pay bills but to acquire things, televisions, cars, homes etc.  All things they can obtain with a down payment but that they cannot afford over the long term.

This puts them in a situation where they need someone to buy structured settlements from them, so they can receive the lump sum payment now.  They have huge debt and need the lump sum to get out.  Usually the structured settlement company will negotiate some really strict rules as far as buying the settlement.  Often times if the consumer would simply manage their funds better, they would not be in a scenario where they need the lump sum payments.

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.