Selling Structured Annuities

Sell Structured Annuities

The benefits of a Structured Settlement

A structured settlement can be a very beneficial financial arrangement in the right circumstance benefiting the recipient greatly. The history behind why settlements have become to be offered as a structure is for several reasons.

1. When someone is injured in an accident they may not be able to return to work either immediately or for the long term. When one is going to go through long term rehabilitation and possible not return to work full time at all they will need assistance to cover their financial needs. This includes everything from basic necessities of food and shelter but also costly medical assistance. When one is unable to work a structured settlement can help ensure that they are financial secure for many years to come. By making recurring (often monthly payments) the recipient can rely on receiving income each month of a specific amount that will cover their expenses and remove the stress and anxiety of their financial burdens.

2. A settlement that is a structure more than anything else to “ensure” the long term financial stability of the injured party. This is the most important fact as many people that find themselves in this situation and select a one time (lump sum) payout tend to spend the money at a rapid pace and soon run out. Leaving the exhausted of funds from their settlement and unable to work from their injuries. There are alarming statistics that document as many as 30% of lump sum settlement recipients spend the majority of their settlement in the first year with nearly 70% spending it within three years.

3. Following on point #2 – when someone takes a lump sum payment and it is any significant amount of money – they then have the stress of needed to manage and invest the money properly to make sure it meets their ongoing financial obligations. This is something that most people do not have the expertise to manage on their own. This is complicated while trying to recover from injuries and going through physical therapy it is hard to put the burden of needing to plan for and manage and invest their settlement to exactly meet their needs going out ten, twenty or thirty years. This is a challenge for a seasoned professional but nearly an impossible task for a lay person. At a minimum if one is to opt for a lump sum they should seek professional assistance although this is often not ideal when one is injured. There is a lot happening in ones life if they find themselves in this situation and having to worry about money is one additional concern that can be alleviated by a properly structured agreement.

While these types of settlements are clearly set up with the best intentions and in the interest of the recipient there are times when this type of settlement can become inflexible.