Benefits Of Structured Settlements For Buyers

So why would a buyer offer to purchase structured settlements? The simple answer is that the buyer is investing in a legally guaranteed source of revenue (the structured settlement payouts) in exchange for a sum total that is less than the full settlement amount. It’s a basic concept of buying low and selling high—in providing the service of paying out a lump sum to recipients of structured settlements a buyer (insurance company or other financial institution) is getting guaranteed funds in excess of the lump sum amount over time.

These are guaranteed revenue streams that the buyer will use to fund other lump sum buys for other structured settlement recipients. Otherwise, the buyer would not be able to manage advancing all the settlement money to structured settlement recipients as they simply would not have enough of a cash reservoir to handle the transactions. Hence, they will only payout a large percentage of the total settlement amount, keeping the leftover amount as their primary means of remaining able to buy other sources of annuity. The benefits of this transaction aside from the obvious include the fact that a structured settlement would normally cease upon the death of the recipient. But when a buyer purchases the settlement from the recipient, they become the new holder of the award—thus even if the recipient dies the money will not stop coming in. Thus What is Good About Them? The Settlement Payments are free from tax and this goes for State level and Federal level. Income received from this kind of the agreement is not at all considered as annual gross income & is thus not taxable.

The structured settlements mean security and often scheduled payments over the specified time period adds some security for lots of people; particularly for the senior citizens living on the fixed income. And it is less likely to be taken benefit of in case, they just have the smaller amounts of money when opposed to keeping the large amounts on hand and they offer the security for kids looking for the college education. Example, the settlement is set-up that can pay for the college tuition. This settles question how they may pay for the schooling. One more method structured settlements add little security is from fact that most of the insurance companies make the payments are a few of largest with best reputations in country.