Structured Settlements and a Chance to Win $1,000!
You heard that right….let’s give away some moolah.
First, though, a thought about structured settlements. What is a structured settlement? These occur usually when two parties settle (often it’s when there’s an accident) and the insurance company agrees to make ongoing payments for a set length of time. Often, these will be monthly payments, but sometimes they’re annual, quarterly, or irregular.
Take this giveaway for example. What if you could either have $1,000 now or 15 annual payments of $100 each?
When I was an advisor, I became a pro at helping clients choose between a structured settlement and a lump sum. Lump sum? Where did that come from?
Well, while there aren’t lump sum offers in these deals, there are companies that can turn your structured settlement into a lump sum. In short, you hand over the rights for them to receive the structured settlement in return for cash they hand you now.
In all reality, deciding whether to accept a lump sum wasn’t difficult. Here’s the magic formula:
1) I compared the lump sum number to the monthly payment.
2) If you invested the lump sum, what return on investment would you need to duplicate the structured settlement yourself?
3) I then looked at your need for cash. How likely is it that you’ll need more than the lump sum now?
4) Finally, I thought about the likelihood that the company will pay your entire settlement. If they become bankrupt, you may not receive all of your money. How likely is it that this will happen? While I never had inside information, Google was a wonder in this area. Also, if it was a long, drawn out settlement, I was more likely to recommend cash up-front because who knows what the future will bring?
Generally speaking, if we could find a way to get cash to my client quickly, we’d choose that option…but not without working through the four points above.
Let’s Give Away Some Money!
$1,000 is a pile of cash for this type of giveaway (the most we’ve ever offered here before was $100….wow!), and entering is a snap. Just hit a few like buttons on some financial bloggers’ Twitter or Facebook accounts, and you’re in! Plus, you’ll be hooked up with more financial stuff in your in box! Remember: you are what you think about. Filling your brain with financial overload every day is a great thing, right? The contest ends January 31, so get in, quick!
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