Getting a lump-sum of cash for some or all of your annuity payments, however, can provide an ideal solution to your cash flow problems. There are many reasons why you might need to obtain cash for your annuity payments. Perhaps a recent divorce or death in the family has put a strain on your finances. Or maybe you’re facing a large expense such as a home purchase, wedding or college tuition.

Whatever the reason, getting cash for your annuity payments can give you instant access to money that is rightfully yours. It can also provide a hedge against inflation, since the value of these periodic payments will be worth much less in the future. You can cash in annuities established for a variety of purposes, such as insurance, structured settlements from personal injury agreements, lottery/contest winnings, royalty payments and trust funds.

When you opt to get cash for annuity payments, you essentially sell the rights to receive these periodic payouts to a third party. Generally, companies will allow you to obtain cash for annuity payments if the payments are guaranteed to be made whether or not you are alive. As another stipulation, the annuity must allow for assignment of the payments and/or a change in the ownership of the annuity.

Many people are under the impression that it is illegal to receive cash for annuity payments without court authorization. However, payments not associated with a settlement do not require such approval to be purchased by a third party. That means you have an unrestricted right to transfer your annuity payout to another individual or company.

Understanding How Annuities Work
Derived from the Latin word for “year”, an annuity is simply a sum of money payable annually or at other regular intervals. In the context of life insurance, an annuity is a contract between you and an insurance company under which the insurance company pays you money for a stipulated period-often for life.

Here’s how they work: The purchaser agrees to pay premiums to the insurance company, in exchange for which the company agrees to make payments at a later time for a specified period. The time during which the premiums are paid is called the “accumulation period”. The premium can be paid in one lump sum or in installments over the course of many years. The person receiving the benefit payments, the annuitant, is usually (though not always) the owner of the annuity.

After the accumulation period ends, the company begins distributing funds either in one lump sum or installments paid out usually on a monthly basis. A common payout option involves a life annuity making payments of regular income for as long as the annuitant lives.

Annuities fall into two main categories: fixed and variable. With traditional fixed annuities, the insurance company invests the premium in its general account. Whatever payout option is selected, the interest gains and payment amounts are guaranteed by the insurance company, which assumes the risk of investing the general account.

With variable annuities, however, the premiums buy units in your choice of separate accounts, which then invest in stocks, bonds, and money market funds. The payout will depend on the performance of the underlying securities in the separate accounts in which the premium is invested. Unlike fixed annuities, the value of the account is not guaranteed—annuitants assume the risk involved in investing their premiums in exchange for potentially higher returns.

Fixed and variable annuities are staple items in the investment portfolios of many pension holders. In fact, under government rules, individuals with a personal pension can take up to 25 percent of the value of their funds as a tax-free lump sum when they retire. The remaining 75 percent must be used to provide an income for life through a capital investment such as an annuity.

What to Consider When Getting Cash for Annuity Payments
Regardless of the type of annuity you own, there are a variety of brokers and investment firms willing to give you quick cash for your annuity payments. To make your annuity payments attractive to purchasers, they must be sold at a lower price than the total amount owed to you. Generally, you must give at least an interest discount equivalent to bank rates. And many companies require even higher discounts to cover their total risk, costs and profit margin.

Before you elect to obtain cash for your annuity payments, carefully weigh your future return and risks against your immediate financial needs. Better yet, consult with a reputable financial expert such as a financial asset manager or planner about your specific situation. Your financial advisor can conduct a professional evaluation of your obligations, income, assets and risk threshold, and then provide you with the best options to meet your needs.

Receiving cash for your annuity payments can be a practical solution to meeting your immediate cash flow needs

When opting on the Internet for annuity plans, it is important to consider salient points to avoid deceptive firms that are only after your money. The number of fraudulent cash for annuity online firms leaves a lot of people at a loss. It is, therefore, very important to check on the reliability of these firms before deciding on which one to employ.

It is essential to thoroughly check the company’s earning history through charts and other materials that clearly state an annuity’s growth over time. This information is available through the Internet, or the company may send a representative to present this information. It is also very important to check on the rates of returns for fixed annuities, although this does not necessarily mean that you will get the projected high annuity return rate, rather a guaranteed minimum rate.

As previously mentioned, the number of fraudulent firms online is increasing; hence, it is vital to verify licenses and certifications. These firms must be backed by Federal security and must be sanctioned by government laws.

Since annuities are a long-term investment, considering the company’s financial condition is also beneficial. A company in a solid and firm financial condition is more likely to guarantee returns later on. Although being stable now, does not guarantee that investors will get fair returns later on due to the fluctuating economic conditions. Financial ratings through time are also easily viewed online.

Cash for annuities online must be backed by physical addresses to make sure that you have a way of making contact other than on the Internet.

Future payments are part payouts that are a result of court proceedings. These payments are mostly received in the form of structured settlements, annuities and annuity settlements. Other types of future payments include, mortgage notes, trust deeds and lottery payments. Future payments are a form of secured long-term income or simply fixed cash income.

However, there are times when people may require large amount of cash at one time. Instead of taking a loan or selling assets, people can easily sell their future payments for cash. Future payments are mostly secured payments. Hence, funding companies provide immediate cash in exchange of these payments. However, it is important to realize that cash for future payments are always available at a discounted rate.

People mostly sell their future payments to increase cash flow at present. Cash could be needed to fund investment opportunities, expensive medical care, vacations and college tuition fees. Other reasons to obtain cash for future payments could be to pay taxes or to meet unexpected financial needs. Some people prefer immediate cash to future payments as it saves them the effort of waiting for cash every month.

While selling future payments for cash, the seller can choose from various options. It is possible to sell partial payments. This means, people can sell a part of their future payments instead of selling all of them. This is done, in order to make available a particular sum of money for a specified need. Full payments can also be sold. The seller receives a lump sum equal to the discounted value of the payments sold.

Cash for future payments is also available by selling shared payments. In such cases cash for a part of the future payments sold is received immediately. The remaining cash for future payments is received on a payable date. Cash for future payments is a matter of personal choice and may even prove to be profitable, if invested well.

Many people like to invest their retirement packages in insurance companies, on the condition that their money is paid back to them on a regular basis. The investor `buys’ this arrangement, known as an ‘annuity,’ from the insurance company. By going in for an annuity, the investor is assured of a regular income through retirement, or thereafter to his heirs.

However, if the individual needs to meet any major financial needs, such as buying a home, the annuity payments that he receives may not be adequate. If he wants to withdraw some amount he can do so by paying some surcharge to the insurance firm. This often turns out to be uneconomical.

Realizing this difficulty, the Federal government introduced some provisions by which the retiree can sell his annuity to a licensed financial organization, who, in return, pays a lump sum amount to the retiree.

The retiree sells his annuities as follows. He approaches the finance organization, fills out a `Form of Request’ known as an `Annuity Lead,’ and submits it to the finance organization. Some people make use of the services of a broker or an annuity lead provider to `generate’ the lead.

An annuity lead is the most important document in a money transfer, and includes details such as date of application, personal information [name, address, city, state, zip code and phone and email address], initial investment, source of funds, payment timeframe [in number of years] and rate of return. It also contains the lead reference number as well as the date and time of lead generation.

It is very important to ensure that the broker, lead providing company and financing organization are licensed.

When an employee retires after several years of work, the employer offers monetary retirement benefits such as a cash balance plan or pension.

Let us consider Nancy, who has retired from work. She likes to invest her retirement package in something that can yield regular income. She invests her money in an insurance company by signing a mutual agreement between her and the company. According to the agreement, the insurance company makes periodic payments to her. That is, the insurance company ‘sells’ an annuity to Nancy. Webster’s Dictionary defines an annuity as `a sum of money payable yearly or at other regular intervals.’

Sometimes, even people who have yet to retire go in for purchasing annuities as a means of saving for their ‘rainy days.’

There are basically three types of annuity payments: fixed, variable and equity-indexed. Fixed annuities are annuities in which the rate of return to the buyer remains constant. Suppose Nancy opts for a fixed annuity for a 20-year time period [known as the ‘surrender period’]. The insurance company assigns a rate of return and lets Nancy know it in advance. This rate of return remains unchanged during the entire 20 years. Because she knows how much she’ll draw every month, it’s much like a monthly salary. But she cannot withdraw any part of her invested amount during the surrender period, without some penalty. Security in a fixed annuity is linked to the financial standing of the insurance company.

Fixed annuities can involve a definite surrender period, as in the above example, or an indefinite period, such as Nancy’s lifetime.

Suppose Nancy buys a variable annuity instead. A variable annuity involves a range of investment options, and the rate of return is tied to internal mutual funds. As these funds depend on financial market conditions, they can go up or down, thereby making the rate of return unstable.

If Nancy goes in for an equity-index annuity, the rate of return can vary depending upon changes in an equity index, such as the S&P 500 Composite Stock Price Index. According to the US Securities and Exchange Commission, she may even lose money, especially if she cancels the annuity early. This is because equity-indexed annuities are complicated and may contain several features that can affect the rate of return.

Annuities can be purchased by single payments or flexible payments. They can also be purchased as immediate annuities, where the yield is earlier, or as deferred annuities, where it is delayed.

Annuities are not insured by the FDIC and are not bank guaranteed. However, they are one of the most popular sources of regular periodic income to most people who are spending their post-retirement years.

Let’s consider one Mr. Benson. He likes to invest his retirement package in something that will yield a regular monthly income. He invests his retirement package in an insurance company by drawing a mutual agreement between him and the company. According to the agreement, the insurance company makes periodic payments to Benson. That is, the insurance company ‘sells’ annuities to Benson. Sometimes, even people who have not retired invest their money in annuities so that they can receive a regular income.

Suppose Benson wants to buy a house. For this he needs money. Can he use his annuity for this purpose? Though his whole retirement benefit package is with the insurance company, he cannot withdraw any part of the amount during the agreed time period, known as the ‘surrender period’, without paying some ‘surrender charge fees’ as a penalty. Suppose Benson bought an annuity with a 10-year surrender period. If he wants to withdraw some of it, he may have to shell out a 10 percent fee in the first year, 9 percent during the second year, and so on. Thus, annuities work like a bank certificate of deposit.

Considering this difficulty, the Federal and state governments have introduced provisions so that Benson can sell his annuity payments and obtain immediate cash. There are finance companies that can buy a person’s annuities and pay him immediate cash in return. The process works as follows.

The person calls the finance company or requests a quote, by phone, email, online or in person. The company offers several options that meet the person’s financial needs. Once the person selects the option, the company completes the application process. The applicant is provided with a disclosure statement and a contract, which he will sign and get notarized. The finance company collects the contract, along with relevant documents, processes the application and submits them for approval to the court. The court reviews the application to confirm if it is in the best interests of the applicant. It is obligatory for the finance companies to follow all relevant state and federal laws in the process.

Once the court approves the application, the finance company notifies the applicant’s insurance company of the transfer. Cash is transferred to the applicant in just a few days.

It is important to see that the insurance firm and the finance company are licensed, and that all transactions are approved by a court order

Webster’s Dictionary defines ‘annuity’ as ‘a sum of money payable yearly or at other regular intervals.’

When an employee retires after several years of work, the employer offers monetary retirement benefits as a gesture of gratitude for the employee’s services. Cash balance plans, pensions, profit sharing plans and stock bonus plans are examples of such retirement benefits.

As this monetary package is usually a lump sum, many people find it difficult to manage it wisely. Many people invest the money in something that doesn’t yield the deserved revenue. How best can a person utilize the retirement package? Our article addresses this question.

Retirement benefits are like a brand-new car that the employee uses to drive back home, the day he or she retires. The well-being of the employee in the car depends on how well he or she manages the vehicle.

Let’s imagine someone named Jane, who retires from an office after several years of work. She likes to invest her retirement benefits in something that’ll fetch income on a regular basis. She invests her money in an insurance company by working out a mutual agreement between her and the company. According to the agreement, the insurance company makes periodic payments to Jane. The payments may begin immediately or at some future date, depending on the terms of the agreement. The insurance company ‘sells’ an annuity to Jane.

Sometimes, even people who have yet to retire go in for purchasing annuities as a means of saving for their `rainy days.’

There’s a difference between life insurance and life annuity. In life insurance, beneficiaries collect the insurance amount after a person’s death. In an annuity, the person himself collects the annuity amount when he lives, and thereafter his nominees collect a certain amount after his death.

There are two types of annuities: fixed and variable. The rate of return in a fixed annuity is fixed, whereas in a variable annuity it is flexible and changes according to financial market conditions.

There are two options under which an investor can buy annuities: deferred and immediate. In a deferred annuity, payments to the investor begin after retirement. In immediate annuity, the payments can be made before retirement. In some annuities, the investor doesn’t need to pay taxes on the income earned by this money until he or she retires.

To put it in a nutshell, annuities assure regular income to the investor in his or her lifetime.

When accidents occur, whether an auto accident, slip and fall, medical malpractice, wrongful death, or any other non workplace related injury happens, structured settlements are often set up with insurance companies to pay for these tortious acts. People who are in involved in personal injury or insurance related cases elect to receive a series of payments over a substantial period of time rather than receive an immediate lump sum payment. These payments typically total more than the amount a person would have obtained for an immediate payment. The injured party(Plaintiff) goes through a process whereby they elect to take this protracted payment, and sign off on a “Settlement and Release Agreement” allowing the Insurer(Defendant) to purchase an annuity policy on the insured’s behalf that would provide for monthly, quartely, or yearly payments to the injured party, who now becomes what is called the Annuitant.

With the advent of new 2002 Federal Laws, and further State Protections, the injured party now has the right to get cash for their structured settlement by selling this annuity stream to an independent third party if he or she so desires. These periodic payments that flow from an insurance company annuity contract(called a structured settlement), may be
transferred at anytime in the future for a lump sum today, but great care should be taken to ensure that the injured party obtains a proper court order. The reason for the court order is one of protection for the injured party, and that protection is twofold; first to protect the annuitant(injured party) from an unscrupulous transaction, and secondly, and just as important in our opinion, to preserve the tax free nature of the transaction. Without obtaining a court order, the proceeds received would be completely taxable, a fighteningly foreboding scenario.

The structured settlement holder should be aware that these annuity sales have specific legal guidelines that differ from state to state. These specific elements must be adhered to strictly in order to complete the transaction. Typically, the injured party receiving the payment stream must execute(sign) a new transfer and assignment agreement disclosing all contractual terms and the price to be paid.

At this point the injured party may be wondering how difficult it is for them to get cash for their stuctured settlement, since the procedure seems complex. In fact, the sale of a structured settlement annuity is a simple, straightforward process that any institutional funder has done thousands of times, and will handle all the paperwork properly. The only thing the injured party need do is make certain they provide the funder with the proper paperwork required in a timely fashion. This process is really a simple cookie cutter transaction. Once in court, the potential sale is announced to all interested parties and then is submitted to the court for their approval.

Bear in mind that this procedure is a process, and typically will take at least 90 days to consummate. In order to expedite the process, the injured party needs to make certain that they respond immediately to requests for information and paperwork from the funding party. The institutional funder should have a vast knowledge of the structured settlement business, and have consummated numerous transactions, and offer you referrals. This is for your protection and an acknowledgement that all proper legal guidelines will be adhered to. If your structured settlement company doesn’t meet these requirements, use someone else.

Can you get cash for structured settlement? Yes. Provided your follow these easy structured settlement guidelines. ]]> http://fcux.net/cash-for-structured-settlement/feed http://fcux.net/getting-quick-cash-for-your-structured-settlement http://fcux.net/getting-quick-cash-for-your-structured-settlement#comments Sat, 22 Aug 2009 11:15:55 +0000 admin http://fcux.net/?p=131

Just because you received a structured settlement for your lawsuit, it doesn’t mean you have to wait for years to get the money. There are many settlement purchasing companies that will give you instant cash for your structured settlement. These companies can pay cash for the entire structured settlement or purchase your remaining periodic settlement payments. You can spend this lump-sum payment on anything-a house, college tuition, business investments or debts.

What Is a Structured Settlement?

A structured settlement, which typically results from a personal injury lawsuit, is an agreement where you consent to accept payments over time in exchange for the release of liability for your claim. A structured settlement can provide payments in almost any manner you choose. For example, the settlement may be paid in annual installments over a number of years or in periodic payouts every few years.

These payments are generally awarded through the purchase of one or more annuities from a life insurance company. Structured settlements can also be used with lottery winnings, contest prize money and other situations with substantial cash awards.

Structured Settlements Not Always the Best Fit

In theory, structured settlements are designed to provide long-term financial security to injury victims through tax-free payments. And for most people, the agreed-upon structured payment plan initially makes sense. However, a financial emergency, a business opportunity, an unforeseen medical expense, or a house purchase can put a strain on the injured party’s finances.

And the structured nature of the settlement may become too restrictive to cover major financial purchases. Also, a structured settlement may not be the best option for investing. There are many other investment vehicles that can generate greater long-term return than the annuities used in structured settlements. Therefore, some people may be better off getting cash for their structured settlement and then building their own investment portfolio.

How Getting Cash for a Structured Settlement Works

If you receive an award from your injury case, an attorney or financial advisor will likely recommend setting up periodic installment payments instead of giving you a lump sum of cash up front for your structured settlement. Then, an independent third party will purchase an annuity that will provide you with tax-free periodic payments.

Companies that offer cash for structured settlements have a variety of programs that can allow you to access any portion of your annuity. For example, you may want to sell as little as four year’s worth of payments or receive a lump-sum payment while still enjoying some portion of your monthly payment. Or you can sell your settlement for a large payment that is five or six years in the future. You can also customize an arrangement to get cash for a structured settlement based on your unique needs.

Here’s an example of how obtaining cash for a structured settlement works: Let’s say you were in an accident five years ago. The accident caused you to be hospitalized for several months and undergo nearly a year’s worth of physical therapy. So you hired an attorney and sued the responsible individual-or, rather, the person’s insurance company. Ultimately, your attorney advises you that you’ll be awarded a substantial sum of money.

After several months or years of negotiation, you receive a sizable settlement. However, the cash you get upfront is only enough to cover the medical expenses. The rest of your compensation is scheduled to be paid out in regular installments through an annuity over the next 15 to 30 years. Rather than being restricted to monthly or annual payments, you contact a settlement purchaser to secure immediate cash for your structured settlement. You’re then able to use the cash to enhance your current cash flow-rather than waiting on periodic future payments.

Legal Issues of Receiving Cash for a Structured Settlement

If you’re contemplating getting cash for your structured settlement, it’s important to contact a financial advisor. Most states have regulations that limit the sale of structured settlements, so you’ll need court approval to receive cash for your structured settlement. Federal restrictions also may affect the sale of structured settlements to a third-party individual. And some insurance companies won’t transfer annuities to third parties.

Also, before you attempt to obtain cash for a structured settlement, be sure to do your homework. Check out multiple companies to see which one can offer you the most cash for your structured settlement. You also want to examine their integrity, reputation and track record. This will help ensure you have the most positive experience obtaining cash for your structured settlement.

Receiving cash for a structured settlement is an ideal option if you need a lump sum of money to meet your immediate needs.

Annuities are a series of payments made by an institution like an insurance company to the annuitant at regular intervals of time over a fixed time period. The payments are fixed and may be on a yearly, semi annual, quarterly or monthly basis. Generally, there are two types of annuity payments called “ordinary annuities” and “annuities due”.

Ordinary annuities require payments at the end of every period until the maturity period of the investment. For example, with bonds, usually the seller pays coupon interest payments to the buyer at the end of every six months. However, sometimes annuity payments will be made at the beginning of each period like a rent payment. These are called “annuity due”. Depending on the frequency of annuity payments, annuities can be divided into deferred annuities and immediate annuities. In immediate annuities, annuity payments are made at much frequenter intervals. Deferred annuities will make the annuity holders receive payments depending on the nature of the annuity. If the deferred annuity is a fixed deferred, the holder will get the guaranteed rate of return at regular intervals over the life of the contract. If it is variable deferred annuity, the payments depend on the performance of the underlying investment. This means the annuitant will not receive any guaranteed amount. However, the payments under the variable annuities are tax-free or tax-deferred.

There are several types of annuity payments depending on the nature of the annuity. If the annuitant or the nominee receives payments after the fixed period in spite of any contingency, such payments are called “annuity with period certain”. If an annuity payment continues after the death of the annuitant, it is called a “life annuity” payment. If it continues over the annuitant’s life or for a fixed period (whichever is longer), it is called “life with period certain”. The latest version for annuity payments is called “equity-indexed annuity payments”.

It is not advisable for the annuitant to get cash value of the annuity by cashing out, unless the annuitant is under financial stress. The ultimate responsibility of cashing out an annuity and getting the payments rests on the shoulders of the annuitant.