If you are representing a Company or a business establishment and find your company in a situation where it has to pay a large cash
settlement to the staff or some other people, then Structured
Settlement is perhaps the best and easiest way forward. In fact, if you
play your cards right, you can also save your company a lot of money by
way of expenses. Here's how:
If your company
has to fork out say $300,000, instead of paying all that in one llump
sum structured settlement, your company could instead, buy an Annuity
plan from an Insurance company legally known as "Assignment Company". If
the recipient agrees to long-term structured cash settlement, then your
structured settlement company might have to actually pay only say
$275,000 to the assignment company which will invest that sum and pay
out small sums each month or as per agreed terms. The total payout will
be $300,000 and the difference of $25,000 will be met by the income from
the investments of the initial deposit of $275,000. The paying company
rids itself of the headache of having to administer the cash for
structured settlement payments over an extended period of time, the
recipient is assured or regular income at regular periods, the insurance
or Assignment Company receives a large sum which it can invest and make
good profits. All three parties to the structured settlement benefit.
The recipient of the structured settlement for cash benefits because instead of receiving one large lump sum
which would probably be squandered on a holiday or some luxury goods,
he or she receives small but significant amounts periodically. The
clock-work payment in cash structured settlement enables the recipients
to pre-plan their investment or expenditure. It also ensures that the
money is not wasted.
Sometimes,
beneficiaries of such structured settlement might urgently need a large
sum of money. This can happen in the event of medical emergencies,
marriages etc. Since structured settlement cannot be changed once they
are signed, the recipient can mortgage the structured settlement
document and secure a structured settlement loan against it. The amount
of loan will depend on the residual value of the structured settlement
less service and commissions. As of today, there are a large number of
such structured settlement buyers willing to issue loans against the
documents. If you are looking for such structured settlement purchaser,
it might be a good idea to shop around since the amounts they are
willing to give as well as commissions and service charges might differ
significantly.
A structured cash
settlement can therefore be a very flexible instrument – one that
benefits the paying company as well as the beneficiary of the
settlement. As far as the company is concerned, it can either opt to
administer the structured cash settlement itself, or invest the money with an Insurance company to buy a structured settlement annuity plan that will make the payouts to the beneficiary. If the company administers the structured cash
settlement itself, then it has the distinct advantage of being able to
differ the liability (because it does not have to pay the entire amount
in one go). In either case it benefits. Whichever way we look at it, a structured settlement is a win-win situation for the beneficiary as well as the payer.
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Good information.
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