If you are set to receive a structured settlement as the product of an injury, medical negligence, or a workers comp case, the commercials out there all promise the same thing: get cash now. Its your money, get it when YOU want it, and so on. Even if you really need the money for some reason, its critical that you take a long hard look at your situation and make sure that giving up your structured settlement for cash now will in fact meet your needs sufficiently. Below are a few of the things to watch out for when you sell your structured settlement.
High Commissions on your Structured Settlement for Cash Now. Annuities like structured settlements can be extremely lucrative for insurance companies, and if that werent enough, they often charge really big commissions on top of it. Make sure you read the fine print in the commission section of the contract so youre sure that youre not paying the commission with too much of your balance.
An Overstated Assessment of your Structured Settlement for Cash Now. After working out a settlement, the defense team will often exaggerate the amount of a structured settlement. Because of this the plaintiff, in agreeing to the settlement, actually receives a drastically lower payment than they agreed to. Many companies have paid the full amount of the settlement, safe in the knowledge that they would later get a portion of that sum back in the form of rebates from the insurance companies they employed. Settlement recipients should compare the costs and commissions charged for similar settlements by an assortment of insurance companies to make sure that theyre receiving ALL of their money. They may want to add in a provision to make sure the defendant pays out all of the settlement and that any rebates wont count in the overall total of funds paid and received.
Self-Dealing when selling your Structured Settlement for Cash Now . It has been known to happen that the plaintiffs lawyer has a side insurance concern as well, and he then sets up the structured settlement sale on his clients behalf without telling his client that he is in fact buying the annuities from his own business, or that hes going to get a rather sizeable commission on those annuities to get. On a similar note, some lawyers will tell their client to go to a certain financial planner to set up the structured settlement without letting them know that the financial planner is going to give the lawyer a rather hefty referral fee. Before you go to that great financial guy your lawyer recommends, be sure that you know whether or not theres anything in it for your lawyer by sending you to that guy.
Life Expectancy. Even though it may be far from your thoughts, you need to think about the fact that your life expectancy may be reduced because of the incident, and in so doing, consider whether you should accept an annuity where the payments would stop when you die. If your life expectancy is reduced, please ensure preparations are made to transfer your balance to your partner or beneficiary.