Structured settlements are one of the best ways to make the most out of your financial situation in certain cases. It is one of the best ways to receive a settlement amount and offers numerous benefits especially in cases where an accident leads to injury to one party. Settlement is just an amount of money which you receive in return of some kind of accident as a financial obligation and when you choose to receive it in a structured manner, you get the same amount in the form of several installments of payments rather than as a lump sum. This is quite helpful because when people receive money in lump sum, they end up spending it on things that they should not. This leaves their medical bills unresolved and unpaid.
Also, in many cases, they are not able to save desired amount of money after the treatment. The money which will be given to you in the form of structured payments which will be sent to you regularly. It is beneficial for one to take a structured settlement instead of taking one lump sum payment as it saves money which you could have lost to income tax and also ensures that you get money in equal and regular installments so you have better control and can manage your income better. It encourages increased cash flow and allows you to receive it continually for a long period of time. So, if you are looking for stability and cash flow, you cannot go wrong with structured settlements.
Current annuity payments brokers in the market
We often get emails from people asking us: multiple companies want to buy my annuity and I don’t know which one to choose. Before we get into that you have to know who exactly is a structured settlement or annuity broker? A structured settlement broker is someone whose job is to assist people during times of claim disputes. A settlement is issued in the form of a structure instead of a lump sum payment from one party to another. The main aim of the broker in such cases is to facilitate the decision making process. The broker works, sometimes in collaboration with other brokers, to assist these individuals resolve their matter and carry a structured settlement transaction successfully.
If you did not know, it is not uncommon for structured settlements to be funded with annuities. These annuities are issued by life insurance companies which leads to your broker earning quite a nice amount of initial commission. Therefore, it is of paramount importance that you contact a qualified and licensed broker who has the knowledge and experience to guide you in the best direction rather than manipulating you to make a decision which benefits only him or her financially. What do we exactly mean by a license? In very basic terms,the license of the broker should be issued by the insurance departments in any of the states that they conduct business in. This means, that if a broker is working in the city of Washington, they need a license by the state if they want to keep working legally in the city. In case they don’t, they will face punishment for deceiving their clients.Usually a state license works well but if your case involves variable structured settlements, it is necessary for your broker to be licensed through the National Association of Securities Dealers.
Licensing Structured Settlement and Annuity Brokers
A structured settlement broker needs to have a valid insurance license because most of the structured settlement transactions are funded with insurance vehicles. Sometimes, only an insurance license does not work and needs to be complemented by a securities license. No matter what these professionals call themselves – a structured settlement broker, structured settlement agent, or even a structured settlement consultant – they would still need a valid insurance license at least to conduct their operations without any issue.
Why has this necessity arisen? The main reason behind the strictness is factoring companies. There are numerous factoring companies around which are working without a license. A strict license requirement has been imposed on structured settlement brokers but they continue to operate despite not being licensed.
What exactly is a factoring company?
A factoring company simply performs the job of factoring your money. In other words, it takes in your structured settlement deal and pays you in a lump sum (or some other method you may prefer over the lump sum). So, basically they are just changing your payment scheme from one type to another. However, they don’t project themselves in the same light they work. They mislead people and appear to be something other than what their actual purposes are. They falsely advertise their services and many times also lead to their clients making decisions which are neither wise nor profitable.
A license will ensure that the structured settlement broker is not someone from one of these factoring companies but a professional who knows about the insurance scheme and wants to help you achieve your financial goals. Factoring companies that project themselves as structured settlement brokers should refrain from doing so and misguiding clueless people. They should reflect what they do in their advertising instead of using false identities to hide their true nature.