Structured Settlement


There are a lot of misguiding statements there about structure settlement being quick cash, or something which is one’s own money. So first of all it is duly important to know, what actually Structured Settlement is all about and why is it needed? Structured Settlement is basically an agreement in the insurance or financial domain which is on periodic payments basis. Things would become clearer if an example is considered here.

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Suppose Mr. X meets an accident and get injured in that accident. Now he would either finance his own treatment or would receive a sum of money from the 2nd party or insurer. This amount is usually tax free for him. But if he would have invested the same amount of money somewhere in some scheme, then the investment earnings would have definitely been taxable. Now coming back to the sum which he received after his accident, if he chooses to receive a structured settlement of that amount instead of the hard cash, then he would get paid for long term of years or even for his lifetime.

Thus in simple words, this is what is referred to as Structure Settlement. It ensures a continuous supply of money for the coming years and of course does best to convert the after-tax earnings into a completely tax free return.

Now these are taken care by specialists, agents and brokers who are available readily in the market. There is the National Structured Settlement Trade Association i.e. NSSTA which has authorized brokers who are more like a special type of insurance agent. They are also known as Structured Settlement brokers. These agents are paid on commission basis by the life insurance companies in which they are working and they are the ones who issue the annuity of the same.

On the other hand, talking about the flexibility of the sell my structured settlement they are quite malleable. If depends on how one wants to divide the cash and structure the rest of the sum to be received on regular basis. Some also look for making profits by selling of their structured settlements to any of the big financial companies. It is also possible to withdraw the complete cash in case of a financial necessity; but once sold, they would not be able to receive monthly payments for the same anymore. Another thing to keep in mind here is this is not for everyone. It is not advisable to structure every nickel they receive. Once it is setup, it generally cannot be changed.

Hence it can be well seen that the Structured Settlements are very much efficient in terms of tax and can serve as an asset along with suitable advantages and benefits. Though there are plenty of tax deferral offers in the current market but still the results of structured settlements are much more alluring and promising in the longer term as well for slow pay outs. So t is advisable to utilize this in the best possible manner and get the maximum cash or profit out of it.


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