The Structured Settlement Protection Act is a law enacted by the government with the aim to protect you - the annuitant from getting harmed by Structured Settlement Factoring Companies looking to buy out your annuities in terms that are not in your best interest.
You have got your structured settlement annuities securing you an income stream for years to come. Now there are the secondary market operators looking for your money.
They want to get your annuities. They are ready to pay for it now.
The catch: you get far less than you would get from your original contract with the annuity issuance company.
Sometimes significantly less that you would get by all fair measures.
This is unfair and unethical. They are trying to capitalize on your despair, excitement, helplessness, or/and lack of knowledge and experience.
They are manipulating you.
How do you protect yourself?
Gladly, the government has stepped in quite some years ago enacting some rules and regulations with the aim to help, protect and empower you.
Read also about Future Value and Present Value of Annuity payments, an important concept to understand what your annuities are worth and how much you get from the buyout compared to the annuities' value.
The government has long been encouraging structure settlement insurance types for injury victims, and the whole point of the structured settlement approach was mainly to ensure that the plaintiff will have accessible funds over the year to cover for his or her expenses and be able to finance medical expenses instead of being dependent on public assistance.
For this reason, structured settlements are also very advantageous over other types of compensation. i.e. being in many cases exempt of taxes, and it's also much regulated and protected.
The very structure of the insurance allows for saving and persevering the money over the long term instead of it being lost and dissipated in a short time, as would likely happen to the majority of the compensation receivers when getting a great amount of money in a lump sum at once.
When the money instead is being handed out in periodic payments over the years, the person is able to cover his or her life expenses without spending it all out at once. Moreover, the money keeps growing due to the interest that is typically inherited in structured settlement annuities.
That's where Future Value comes into play. If you invest your money today, it will have more value in years from now. It is important to know how much your future periodic payments are worth in today's money.
Structured settlements have been in use for decades since the 80's and over the years have grown more and more in popularity. Today it is still one of the most preferred and recommended injury compensation insurance plans.
Despite its many advantages, some people still prefer to get a lump sum right away instead of spreading it out over the years. They are even ready to sell their annuities at a discount and give up part of their money in exchange of an immediate pay out.
Often, this is due to despaired dependency on cash to finance life expenses. Other times it's simply because of being tempered -- frequently intrigued by enticing ads offering "structured settlement cash now" -- for getting a nice amount of cash in hand at the moment. This need eventually gave rise to the creation of a secondary market of structured settlement factoring companies.
The structuredsettlement factoring companies are companies who are willing to buy out your structured settlement. They are ready to pay you a certain amount of money so that you sell them structured settlement at a discount.
Once sold, you'll get your money now while they'll take over your structured settlement annuities and get the money over time. Thus, they'll get part of your injury compensation w/o them getting injured. They'll enjoy profits in the long run. This is a structured settlement-investment.
Exploiting the needs and ignorance of structured settlement claimants, some factoring companies sparked controversy by sharply increasing the discount and offering the payee an unfairly low amount of the original annuity payments plan.
Likewise, you can still see a great many ads around calling to sell your structured settlement "now."
Oh, really? Can you get cash for your structured settlement NOW? Those are example of questionable tactics employed by some structured settlement buying companies in order to entice the policy holders to sell their structured settlement and sell it to them.
As a result of controversial and sometimes outright unethical activities exercised by structured settlement buy-out companies, some State governments started to enact laws in regard to selling structured settlement annuities in order to protect the interests of the injury victims.
Many others states followed suit and soon most of the states have joined in regulating the structured settlement transfer process.
These rules have become known as the Structured Settlement Protection Act (SSPA). The federal government eventually passed rules as well pertaining to buying out structured-settlement plans.
Among others, the Structured Settlement Protection Act regulations require a structured settlement selling prospect to get court approval in order to do the transaction.
This is aimed at verifying that the plaintiff knows and understands the process including the costs and drawbacks of selling the periodic payments for an immediate lump sum, in full or in part, and that the transaction is in the best interest of the payee and his/her dependents, given their financial status and life circumstances.
The exact definition of "best interest", a vague and obscure term, as required by the Structured Settlement Protection Act, is open to interpretation by the judges and allows for a great deal of flexibility in determining eligibility of injury victims to sell their annuities. Indeed, most of the cases are being quickly approved at the court hearing.
Other regulations of the Structured Settlement Protection Act vary by state. Some states forbid selling workers compensation structured settlement. Others require consultation and advise by attorneys or financial advisors on the part of the payee before selling the payments in order to make sure they understand the process well and it's in their interest indeed although it may be up to themselves to decide.
Written explanations by the buyout companies of the process and all the included fees and charges, as well as allowing the payee a certain timeframe to reconsider, are generally required by law.
In order to know exactly your rights, as well as the rules and obligations in regard to your structured settlement, in accordance to federal or state-specific laws and in full compliance with the Structured Settlement Protection Act, it is worth that you contact a lawyer or financial adviser for legal guidance.
Ready to sell yours....? Call now to get started.
As an experienced and trusted buyer, rest assured your rights will be fully respected, and the Structured Settlement Protection Act honored.
You'll get a fair deal.