RECEIVING PAYMENTS FROM A STRUCTURED SETTLEMENT WITH AN INSURANCE COMPANY
A structured settlement is a means of receiving payment for an injury without incurring large tax fees or having to fight to get the money that was awarded. This type of payment in court cases is most common in personal injury lawsuits.
The claimant, or individual that was injured, brings a suit to court.
When the claimant is found to have proved their case, they are typically awarded a settlement in cash terms.When these settlements are for large amounts of money, the award is then structured into periodic payments.
The defendant, or individual found to be at fault, then has to pay the claimant reparations. This is usually done by the defendant’s insurance company. The company then sets forth a plan of payments with the court to get the award fully paid to the claimant over a specified period of time.
The insurance company then needs to offset this cost so that they do not need to hike rates on other customers, or go bankrupt.
In order to offset the structured settlement, the insurance company will typically purchase a financial instrument.
This can be either an annuity or a qualified funding asset.
An annuity is the most common means that the insurance company will use to offset the costs of paying on a structured settlement. These instruments offer not only a way for the company to offset the costs of payment in a structured plan, but also to guarantee to the courts and the claimant that the payments will be made.
When insurance companies purchase an annuity, it is typically done through a life insurance company.
This allows the primary company to weigh out the debt or obligation by using an offsetting asset. This is done in order to assure that the payment stream of the annuity directly matches that of the required payments of the lawsuit.
When the annuity is initially set up, the claimant from the lawsuit is typically named as the recipient of the annuity payments. The annuity issuer then makes all payments directly to the claimant at the scheduled dates and amounts as set forth at the initiation of the annuity.
The claimant has the ability to transfer these payments into one lump sum amount if they so choose.
One will typically need to wait the initial 45 days after the lawsuit is settled in order to assure that everything is set up and on schedule.
If this option is chosen, the claimant will need to pursue this desire through a legal financing company. This type of company has the right and ability to buy all or part of the overall settlement amount. Keep in mind though, that if a lump sum is desired, it will tend to be a little less than the outcome that was reached within the confines of the court.
The claimant will also need to keep in mind that approval for this lump sum to be acquired will need to go through the courts and the insurance companies.
If these entities do not have a problem with a lump sum settlement being issued, then the claimant can say, “Ok I will sell my annuity payments to this financing company” (for the specified amount in the lump sum contract) which is then transferred to the financing company.
If a person wants to pursue this avenue, then DRB Capital is one such company that can get you the money you need now. They have the experience and the knowledge to turn your structured settlement into a lump sum payment. Why wait for the money when it could be put to good use now? Call DRB Capital at 1-844-858-6919 now for your money! Don’t hesitate to see if you can get settlement money now rather than in the future.