Insurance World

What is a Structured Settlement? A Structured Settlement is a Settlement in which you receive “Structured” payments on a regular basis. In other words, it is a payment plan, in which, instead of getting a large lump sum, you receive smaller payments in increments. These increments go on weekly, monthly or yearly cycles. These settlements are often known as a win-win situation because the payer needs to come up with a lot less money up-front and the payee has a steady stream of income coming in at all times. This process can also be described as Annuity.

When are structured settlements used? Structured Settlements are often, but not limited to, these common situations:

1.
Lottery Winnings – Often times, in the Lottery, you can opt to receive numerous smaller payments in exchange for a single larger payment.
2.
Malpractice Cases – In situations where a family member is lost or left crippled due to medical malpractice, the party may be entitled to a structured settlement over the span of the victim’s life or as a grievance payment. These payments don’t fix things, however, they are meant to make living a little bit easier for the victims and families.
3.
Insurance Cases – In many insurance cases, this form of settlement is used. This is because it is easier to make smaller payments over a longer period of time as well as the damage left behind may be better dealt with over time.

Understanding these concepts are important in the process of properly handling your income. It is important also to understand how money works over periods of time. Over long periods of time the value of the dollar is likely to decrease. This means if one was to receive, for example, $1000 a month for 20 years, that $1000 dollars could only be worth $500 at the end of the term. This is one reason some people decide to sell their structured settlement for a large lump sum.

One people decide to sell their structured settlement there are numerous reasons behind it. The first reason may be that, due to their immediate needs, they need a larger amount of money right away. A good example of this would be when buying a new car or home. Another reason people decide to sell is because they would like to invest it into something that gains equity over time and actually grows in value rather than decreases. Some people want to fight the cost of inflation and take the monthly payments and re-invest. This is the wiser choice of the two most of the time.

When selling your structured settlement or selling Annuity, it is almost always advised that you do your homework first. Don’t sell to the highest bidder right off the bat. Before hand you should read up on what your options are. Seek the help of a broker, a financial advisor and a legal professional first. By doing this, you can protect yourself from scam artist to defend yourself from transactions lacking in integrity. It is always smarter to take the safest route possible. Selling Annuity can be dangerous so it is always wise to make slow and steady steps.

The very best time to arrange life insurance is when it’s furthest from your thoughts. Take a typical young man. He’s at the start of his career, possibly still living at home, but thinking of looking around for a flat. He has a car and the insurance that he arranged for it was probably his first step in the insurance ladder.

If he decided to take out some life insurance, whilst he’s still young, fit and healthy he’d get the best possible rates. Probably the most valuable insurance at this stage is Critical Illness (CI) cover.

Whilst life insurance is designed to pay out to your beneficiaries if you die, CI cover will give you valuable support if you become critically ill. For our young man, starting on his career, an illness of this type could be a financial disaster. It is a fact that one in three people will develop cancer at some time in their lives, but the good news is that treatment and cure rates are improving all the time.

Advances in medical science thankfully mean that more and more people will survive many of the major serious illnesses. Unfortunately this recovery can take many months, or even years and necessitate long period of time off work. It may not be possible to carry on with the same work, meaning a change of career. In some cases it may be necessary to change your home and car.

Without CI cover, he’d probably find that his company would pay his salary for around three months and after that he’d have to rely on incapacity benefit. For those on contract work and the self-employed the situation is even worse. CI insurance will pay out a lump sum to cover your expenses and leave you to concentrate on your treatment and recovery.

There’s a very wide range of CI policies available. All will cover what are know as “Core Conditions”, which are Cancer, Stroke, Heart Attack, Coronary by-pass surgery, Kidney failure, Major organ transplant and Multiple sclerosis. Some will cover up to 30 additional conditions.

At the time of purchase of the policy, the medical conditions for which you would be covered should be fully listed. Go through this carefully and make sure that you understand any exclusions within the cover.

It is essential to fill in the application form very carefully. If you fail to disclose a previous illness or condition, then you may find that the insurers will refuse to pay out. Our typical young man should be fine here, as long as he makes sure that he discloses all illnesses, no matter how minor they seemed at the time. The older you get, the more conditions and illnesses there are to remember and the greater chance you’ll forget something which you thought was trivial.

Having got CI cover sorted, this would be an excellent time for our young man to arrange some simple life insurance. Simple life insurance is reasonably priced and offers important cover. A term insurance policy will run for a set number of years. If the policyholder should die during this period, a lump sum would be paid to his dependants. Even if there are no dependants when the young man first takes this cover out, there may be loans and other debts and maybe some fairly “light” cover, for a limited term would be a good step to take. It can be topped up as circumstances change. Certainly his insurance will never be cheaper – when it comes to insurance, it’s a case of the younger the better.

Our smart young man doesn’t even have to waste his valuable time chasing up insurance. A quick visit to an on-line broker will give him all the advice he needs and the very best of quotes, with on-line discounts too.