Are you receiving a structured insurance settlement? Did you know that you can sell structured insurance settlement payments to a buyer for a lump sum now? Selling structured settlements is quite easy, and this can be very beneficial to you. You can invest that lump sum and make more money than you could with a structured insurance settlement than structured payments. Obviously another benefit to you is that if you absolutely need the entire lump sum right now to pay off bills you could do that as well. Spending it now or saving it, which is up to you, however, you will not have to wait for any more money. It can be quite nice to have access to a flush of cash and use it to pay off debt, or cover old education or injury expenses.
Selling structured settlements, or selling structured insurance settlements, both a form of annuity, can be very powerful money makers. Wikipedia defines a “structured settlement” as such:
A definition of “structured settlement” can be found in Internal Revenue Code Section 5891(c)(1) (26 U.S.C. § 5891(c)(1)), which states that a structured settlement is an “arrangement” that meets the following requirements:
• A structured settlement must be established by:
o A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2) (26 U.S.C. § 104(a)(2)); or
o An agreement for the periodic payment of compensation under any workers’ compensation law excludable under Internal Revenue Code Section 104(a)(1) (26 U.S.C. § 104(a)(1)); and
• The periodic payments must be of the character described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c)(2) (26 U.S.C. § 130(c)(2))) and must be payable by a person who:
o Is a party to the suit or agreement or to a workers’ compensation claim; or
o By a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with Internal Revenue Code Section 130 (26 U.S.C. § 130).
It is important to note that the language immediately prior to Internal Revenue Code Section 5891(c)(1) states that the definition that appears there is “for the purposes of this section”. Internal Revenue Code Section 5891 entitled “Structured Settlement Factoring Transactions” deals with the excise tax imposed on the “factoring discount” (see IRC 5891(c)(4)), when there is a purchase of structured settlement payment rights and the exceptions to the excise tax. A number of structured settlement industry commentators have been observed attempting to broaden the express language that appears in the Internal Revenue Code.
Understand that when you sell structured insurance settlements that you will get less cash than was awarded to you. However much like taking the lump sum if you win the lottery, structured insurance settlement payments are actually worth less over time because of the rise of inflation. Invested properly, you could make much more money by receiving a lump sum and investing it now opposed to just receiving your structured insurance settlement payments.
There are a few reasons you might not want to sell structured settlements. If you are bad with money, you might not want to sell structured settlement payments. Once you are flush with cash from your lump sum you might blow it all. If you do, you will surely regret the day you decided to “sell my structured settlement payments”. However if you somewhat financially responsible, it could be much wiser to inquire about selling your structured insurance settlement.
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