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Different Types of Structured Settlements You Can Sell

We are asked if I have a payment that is due in 25 years and I have sold off the next ten years of payments that are an income stream of $4,500 a month can you buy the payments that remain? The simple answer is yes but we must go over the procedure and learn more about your payments first.

Here are some of the different payment types with regards to Getting a Structured Settlement:

Income for Life Annuities - This is a non-life contingent payments. The income is 100% guaranteed and often re-insured. They are created to balance your living expenses and calculate enough for your future expenses. The payments can be temprorary life, bi yearly meaning that if you receive a payment in 2015 then the next one will be 2017, 2019,2021,2023,2025 and so forth. Annual meaning that you get the money every single year. For example $25,000 in 2014, $25,000 in 2015, and $25,000 in 2016 and so on. Semi-annually can be twice a year you will get $40,000 so on January 1st, 2015 you get $40,000 in cash and on July 1st, 2015 you get another check for $40,000 from the insurance company. quarterly means that you get payments 4 times in one year every single year until the payment rights expire. So on January 1st, 2015, April 1st, July 1st, October 1st, and then the payments would start again the next year every quarter until expriation date. Monthly means every signle month you get money. This may be the 15th of every month. So February, April, and May 15th you get a check to cover your living expenses. Bi-Weekly is every other week you will get a check to cover your living expenses. Every other week means on the 2nd of the month and the 16th or 17th of the month you will get your next check. Finally the most frequent type of Income for Life Annuity is a weekly payment that you get every Monday or Tuesday all 52 weeks out of the year. These Weekly Payments can add up to a substantial income to support your every day needs.  These weekly payments may come in for 15 years or 180 months straight or if the living payee or beneficiary passes away then the payments will cease.

Deferred Structured Settlement Lump Sum Payments - These are similar to what our annuitants cash ut on the Income for Life Annuities where they take the money on an as needed basis to cover an expensive medical bill that they have or will need money for surgery, retirement, or to fund your college education. Most lump sums are on a life contingent basis and others are on a guaranteed basis.

Step Annuity - These deal with the time value of money and inflation. As time goes on things tend to become more expensive such as Electricty, Insurance, Gas, Food, and Housing costs. These annuities incorporate that into the payment streams where the amount you receieve goes up in value at a fixed rate for a fixed period of time. This is very similar to "Percentage Increase Annuities" where the gradual increase goes up to protect against inflation at a fixed percantage amount over a period of time as well. The main difference between Step and PIA's are that Step's do not increase on a fixed percentage but just have growing payment amounts to cover the higher costs of living.

Index Linked Structured Settlements - This is tied to the stock market. The changes are based on the growth of the S & P 500 also known as the Standard and Poors 500 index. The maximum the index linked structured settlement can go up in value is 5% points per year. The market can crash in a year but the payments will not go down so there is no downside to this type of annuity stream. Also there is an adjustment period that comes on the date in which the settlement was paid out on.

Deferred Defined Benefit Annuities - This permits an annuitant to push back or "defer" the beginning date of the payments. The later date if requested with a known benefit amount for the structured settlement annuitant or plaintiff in the case. 

Period Certain Annuity - This is very common for those who want to sell their payments. These annuities are paid out for a specified period of time nad then stop. Payments are made during a period of ones life when the money is needed. For example throughout the next 7 years when the annuitant attends college and Law School they will receive monthlies in the amount of $2650 until graduation. At the end of the payment period there may be stimulation for the cash flow from a bond that is held until it's maturity. Other examples of this period certain annuity or a PCA as some clients call it is created to layer retirment income for structured legal fees. 

Joint and Survivor Annuities - These come into play for siblings or family members but are under a single contract. If one primary annuitant passes away or dies the other will still retain the payments at an equal or near equal amount. This is common for family members involved in a tragedy that leads to a lawsuit for personal injury.

Treasury Funded Structured Settlements - Similar to how an investor can hedge against inflation with TIPS also known as Treasury inflated protection against securities. As inflation changes so does the value of the structured settlement which will align with the cost of living that is consistent today and into the future. These are not very common but from time to time there is interest in selling TFSS payments. 

Variable Income Payout Structured Settlement - This is the biggest gamble of the settlements as it is linked and a gamble on the success of the stock market. The equity markets have historically increased over time but the advantage with the VIPPS is that the tax treatment received for these payments. The different variations can be quasi lump sum basis payouts, joint and surivivor based as discussed above, deferred payouts, life with periodicity, and life only.

ESI (Enhanced Structured Income) - These are segments of settlement payments for a beneficiary that are purchased outside of the primary market but rather on the secondary market for structured settlement annuities. These are purchased by investors looking for safe returns, retirement and wealth management funds, and for other reliable income streams. Please note that the tax implications do change when they are sold on the secondary market.
If you have questions about buying or selling these type of payments then we will guide you through the process and help you out.