Viatical settlement involves the selling of the life insurance policy of a terminally ill person, whose life expectancy has been predicted to two years or so, to any unrelated investor. The investor buys the policy at a reduced rate based on the actual face value of the policy and then collects the benefits after the demise of the original policyholder. The longer the life expectancy, the lower the returns. This gambling on death may sound disconcerting to many but if the transaction is carried out fairly, the settlements can provide financial relief to the person who is already undergoing the physical and emotional trauma of a terminal illness. To ensure that the transactions are fair and that the patients do not fall prey to the pressure tactics of unscrupulous elements, the Viatical and Life Settlement Association of America (VLSAA) came into being.
Archive for August, 2008
Sometimes senior citizens no longer need their policies which they had taken in their youth. They may not be able to pay the premiums anymore, or they may need the cash for some other purpose. Some years ago, the only options to get rid of unwanted policies were to cash them in at their surrender value, or, worse still, to allow them to lapse. Both these methods caused a serious loss to the policyholder.
We have all heard of the people who win the lottery and they are broke within a few years? It is amazing really how unfortunate this really is. In fact it is all too common. Did you know that this is the very reason for structured settlements in lawsuits to help the person awarded the settlement a payment over time, so they can exist without blowing all their money. Of course this may not be such a good idea if the person is trying to buy a house and cannot come up with the down payment or needs the money for an operation or medical care for their mother.
There are various forms of future payments such as structured settlements, annuity settlements, mortgage notes and trust deeds. These are considered as assets that generate funds in installments spread over a period of time. Many people who own future payment deeds sell them to create greater liquidity. Annuity payments are the most common type of future payments sold.
There are options available for a person wishing to sell future payments. An individual is motivated to sell future payments, as it is a source of immediate funds in an emergency. A seller is also enticed to divest a future payment deed as the money received immediately can be invested for best returns.
A structured settlement is an arrangement where instead of a lump sum of cash being awarded to a claimant, a tax-free periodic payment is agreed. Structured settlements are often used in guardianship cases, workers compensation cases, wrongful death cases and severe injury cases. Research has indicated that the more severe the injury, the more likely it will be that a structured settlement will be used.
The first thing that you may be asking yourself is, what are the advantages of taking a structured settlement over a cash settlement? The first reason is that it offers long-term financial security and protection to the plaintiff. It has been estimated that 90% of all large cash awards are spent within 5 years due to poor financial management skills.
Because it is tailor-made for individual cases, the structure may also include some immediate payment to cover special damages. The payment is usually made through purchase of an annuity from a Life Insurance Company. Subcontractor A trade contractor such as a roofer who usually subcontracts with a general contractor. Subrogation Once a company has paid a loss for which someone other than the policyholder is responsible, it may have the right to recover this loss.
Life insurance settlement is the purchase of the existing insurance policies from the policyholders at a fixed percentage of the total cash value of the policy. This can be taken advantage of by a senior citizen who thinks that his or her policy is no longer needed, or by a terminally ill person who is in bad need of money for meeting expensive medical treatment. If policy owners observe that their insurance policies are not performing well in the market, they will sell the policies to third parties generally life insurance settlement companies or brokers. The sole business of these organizations is nothing but purchasing existing insurance policies. A corporate life insurance settlement is obviously the life settlement of the insurance policies purchased by corporate employers for covering employees’ retirement plans.
Life insurance is a popular policy investment sold by various insurance companies. In order to safeguard personal interests and those of the family, a large number of people opt to purchase a life insurance. In due course of time, if a policyholder is diagnosed with a terminal illness, the insurance company is legally bound to recompense the person. In case of an incurable ailment, policyholders need to spend on expensive medical treatment, to ensure comfort for the remaining years of their life. These medical expenses can be huge and policyholders may choose to cash in, on their life insurance. This is termed as a ‘viatical’ settlement and a number of investors are willing to pay for them.
You should not cash out your annuity when it’s not in your best interest.
Here are 3 reasons it might not be in your best interest; it’s too soon, you don’t have a good enough reason, it will cost you too much. Every day someone cashes out their annuity or settlement when it might not have been in their best interest. It’s an easy mistake to make when the call of money and burden of financial stress is weighing heavily on you. But read carefully and maybe you can avoid digging the hole deeper.
Burn injury settlements depend on the extent of injury, defined in terms of area and depth of tissue damaged. Burn injuries can be caused by chemicals, electricity, heat and radiation. Settlement amounts are usually large owing to factors like expensive medical treatment and permanent physical damages including disability, scarring, infections, blindness and hearing loss, as well as lifelong psychological pain.