Cash for Structured Settlement: Tips for Selling Annuity Payments

Entering into cash for structured settlement agreements is a complex process that normally takes 2 to 3 months to complete. Annuitants must determine if their state allows the sale of future annuity payments. The majority of states prohibit this practice and those that do require Annuitants to obtain authorization through the court.

Obtaining cash for structured settlement payments could present Annuitants with unexpected tax consequences. When individuals receive annuity payments as compensation for injury, the payments are tax-exempt. However, when Annuitants sell payments for lump sum cash, the funds may be subject to both state and federal taxation.

There are several different uses for structured settlements. The most common use is to provide compensation to individuals who have been injured due to a car accident, medical malpractice, workplace injury, or negligence of another person. Injury settlements are structured to ensure injured parties receive adequate compensation for lost wages, medical expenses, and living expenses.

Courts rarely authorize the sale of injury-related structured settlements because annuity payments are intended to allow Annuitants to maintain their normal standard of living. If Annuitants require lump sum cash for items that will improve their standard of living, courts might allow them to sell a portion of future annuity payments.

Annuitants have many reasons for selling structured settlement payments. The most common reasons are to pay off debts, make home improvements, college tuition, and investment purposes. Although selling annuity payments can be a good option for obtaining lump sum cash, Annuitants must take time to calculate the true costs.

Obtaining cash for structured settlement normally involves court fees, attorney fees, funding source fees, and potential taxation. It is usually less costly to take out a personal loan through a lender.

To sell partial payments, Annuitants assign payment rights for future payments to a funding source. Once the funding source is repaid, payments revert back to the Annuitant. For example, an Annuitant requires $40,000 to purchase a handicap-accessible van. They receive quarterly structured settlement installments of $5,000 and would need to assign payment rights for two years' of annuity payments.

Another consideration of selling structured settlement payments is annuities are underwritten by life insurance companies. In order to assign future payments, Annuitants must obtain permission from the underwriter. Insurance companies are not required to engage in this type of transaction. Even if Annuitants obtain court authorization, life insurance companies can block the sale and refuse to assign future payments to the funding source.

If the court and life insurance company authorizes the sale of future annuity payments, Annuitants must find a trustworthy funding source. This is usually a private investor, investment group, or cash advance provider. Banks and credit unions generally do not provide cash for annuity payments. Some financial institutions might allow Annuitants to take out a personal loan using the structured settlement as collateral.

Annuitants should consider consulting with an annuity broker to obtain the highest offer. Funding sources charge fees when presenting advanced funds. Cash advance fees typically range between 10- and 40-percent of advanced funds.

Annuitants that elect to sell structured settlement payments should comparison shop funding sources to obtain the best rate. Once Annuitants accept an offer from a funding source, they must enter into a contract and file legal documents through the court. Afterward, funds can be distributed to the Annuitant. The overall process of obtaining cash for structured settlement is about 3 months.

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Simon Volkov

Are you considering obtaining cash for structured settlement payments? Learn more about the process before selling future annuity payments..

Pros and Cons of Annuities - Tips For Getting Annuity Leads

When considering annuities as a vehicle for your safe and secure money, several pros and cons likely to become obvious. While annuities may not be for everyone, they can provide benefits not available in any other financial instrument. Here are the pros and cons of considering investing in annuities.

Passive investment: Annuities allow for the owner of the annuity to have almost no involvement in any actual investment. The insurance company invests the funds and provides the professional side.

Safety and security: Annuities are some of the most safe and secure possible places for investing your money. The insurance company is regulated by each state's Department of Insurance and in addition each state provides each annuity owner with an underlying guarantee form the State Guarantee Fund. The limits of the guarantees are set by each state and can vary.

Loss of Control: A downside of investing in an annuity can be losing of actual control over your money. The management of the annuity is placed on the responsibility of the insurance company.

Lifetime Income Option: A solid benefit of investing in an annuity is the option to convert the funds in an annuity to lifetime income. The responsibility for the income falls on the shoulders of the insurance company and not the owner of the annuity. The income cash flow is the responsibility of the insurance company which allows for peace of mind to the annuity investor.

Probate Avoidance: If an annuity has a named beneficiary the proceeds of the annuity at death of the annuitant are paid directly without the need for probate. The funds are received quickly and without delay, fees or expenses.

Are you struggling to generate enough annuity leads for your business? Do you want to Solve The Annuity Lead Problem Forever? Do you want to discover a proven annuity lead generation system that has worked for 1000's of annuity agents all over the world? If yes, then you need to get a copy of Bill Broich's Endless Lead Flow System!

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Bill Broich

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A Little-Known Community Spouse Medicaid Compliant Annuity Planning Technique

The legislation regarding annuities contained within the Deficit Reduction Act of 2005 ("DRA") seems to apply only to the "annuitant who has applied for medical assistance."  However, most post-DRA states apply the provisions also to an annuitant that is the spouse of an individual who has applied for medical assistance.

Notwithstanding the above, a handful of post-DRA states do not requires an annuity purchased by a community spouse to be irrevocable, non-assignable, actuarially sound, and provide equal payments.  The provisions pertaining to designating the state Medicaid agency as a remainderman still apply.  This means community spouse can take advantage of balloon-style Medicaid Compliant Annuities in the select states that do not apply DRA in its entirety to spousal annuity purchases.

A balloon-style Medicaid Compliant Annuity is an immediate annuity structured with very small monthly payments, with the exception of the last payment which is very large.  Upon maturity, the final payment is paid to the insured.  Why would a community spouse want to take advantage of a balloon-style Medicaid Compliant Annuity?  In light of the very small monthly payments derived from the balloon-style Medicaid Compliant Annuity, the community spouse may receive a large income diversion from the institutionalized spouse.  Of course, this will vary depending on the community spouse's income level and the applicable monthly maintenance needs allowance.

Meet Clarence and Martha.
After a long struggle with Alzheimer's, Clarence entered a Florida nursing home on January 1, 2012.  Together, he and his wife Martha have a home, standard furniture and personal property, one car, prepaid funeral plans, and $245,000 in non-IRA bank accounts.  Clarence has monthly income from social security and pension of $2,300 while Martha has monthly income from social security of $500.  Clarence's nursing home bill is expected to be $6,200 per month.  Martha would like to immediately qualify Clarence for Florida Medicaid benefits.

The Balloon-Style Medicaid Compliant Annuity.
Of the countable resources, Martha is allowed to keep no more than $113,640 as her community spouse resource allowance, and Clarence is allowed to keep $2,000 as his institutionalized individual resource allowance.  After the protected resources are taken into consideration, the spend-down amount is $129,360.  With Martha being 79-years-of-age she is allowed to purchase a balloon-style Medicaid Compliant Annuity with a period certain of 1194 months.  With an investment amount of $129,360, the balloon-style Medicaid Compliant Annuity will provide income to Martha of $116.32 for 188 months, with the final balloon payment of $128,286.32 occurring in month 119.

Medicaid Eligibility.
If Martha purchases the annuity in February of 2012, the spend-down amount is eliminated and Clarence is immediately eligible for Florida Medicaid benefits.  As a result, in February of 2012 and each month thereafter Clarence's Medicaid co-pay is $40.32.  This amount was determined by reducing Clarence's monthly income of $2,300 by the $2,224.68 that was shifted to Martha, and his $35 monthly personal needs allowance.

Economic Results.
With Clarence and Martha expecting to pay $6,200 per month for Clarence's nursing home care, by immediately qualifying for Medicaid benefits Clarence and Martha will save $6,159.68 in February of 2012, and each month thereafter.

Advantages of the Balloon-Style Medicaid Compliant Annuity Plan.
Clarence obtains immediate Medicaid eligibility and is able to contribute to Martha's income so that she may continue to reside in the community as long as possible.  Had Martha opted to proceed with a level-pay Medicaid Compliant Annuity in lieu of the balloon-style Medicaid Compliant Annuity, Clarence's co-pay would have been $1,066.05, resulting in a monthly savings of $5,133.95.  This is $1,025.73 less per month than the balloon-style Medicaid Compliant Annuity plan.

Disadvantages of the Balloon-Style Medicaid Compliant Annuity Plan.
If Martha predeceases the 119-month period certain of her balloon-style Medicaid Compliant Annuity the Florida Medicaid program will be entitled to be reimbursed for the Medicaid expenses paid on behalf of Clarence.  In such an event, Martha's balloon-style Medicaid Compliant Annuity may leave little or no residual benefits to intended heirs.

Alternate Balloon-Style Medicaid Compliant Annuity Option.
In that the Florida Medicaid program does not have a restrictive definition of "actuarially sound" Martha may want to reduce the period certain of her balloon-style Medicaid Compliant Annuity to ensure that she will outlive the term.  Unlike a level-pay Medicaid Compliant Annuity, decreasing the term of a balloon-style Medicaid Compliant Annuity changes the monthly pay-out on a very miniscule basis - usually only pennies.  Should Martha opt for a 60-month term instead of the previously outlined 119-month term her monthly pay-out would only increase by $0.49.

Interesting Planning Points.

1.    Should Martha decide not to proceed with the aforementioned balloon-style Medicaid Compliant Annuity plan and instead continue to privately pay for Clarence's nursing home care, Clarence and Martha will exhaust their entire spend-down amount in approximately 33 months.
2.   Should Martha's financial needs change (i.e. her health deteriorates and she transfers to an assisted living facility) she may require a greater amount of income than the balloon-style Medicaid Compliant Annuity provides.  At any time during the pay-out period of the balloon-style Medicaid Compliant Annuity, Martha may elect to convert the balloon-style Medicaid Compliant Annuity into a level-pay Medicaid Compliant Annuity; this is a one-time election.
3.   If Martha's balloon-style Medicaid Compliant Annuity is nearing maturity and Martha decides it is not in her best interest to receive the final balloon payment, she may elect to continue/rollover the balloon-style Medicaid Compliant Annuity into another policy, taking her new life expectancy into consideration.
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Dale Krause

Dale M. Krause, J.D., LL.M., has provided Medicaid Compliant Annuities to elder law attorneys, and their clients, throughout the United

9 Questions you Must Ask Before Buying An Annuity

There are many different types of annuities. There are situations that an annuity would be the right decision and there are situations that an annuity would be the wrong decision. Annuities can be very confusing. There are hundreds if not thousands of different annuities with different features and benefits. Before buying any annuity, make sure you get the answers to the following questions.

1. What company is it and what are their ratings?
An annuity is only backed by the quality of the company writing it. Find out the rating of the company and make sure it has a rating that you are comfortable with. Ratings go from AAA down. I suggest you stay with a company that is A rated or better.

2. What is the surrenders charge?
Annuities do not charge sales charges up front. Instead if you take the money out before a certain time you must pay a surrender charge. You must be very clear how much that charge is and for how long. The surrender charge is usually on a sliding scale, with the first year or two the highest percentage, then the rate lowers every year. Annuities that have over a 10% surrender charge and/or a charge that last for more than 10 years is often excessive. Make sure you know these numbers before you buy the annuity.

3. What are the penalty free withdrawal provisions?
Most annuities have a penalty free withdrawal. From my experience, the better companies usually have a 10% yearly penalty free withdrawal provision. That means that you can take up to 10% of your accumulated value (the money in the annuity) without having to pay a surrender fee. I have see onerous annuities that have only a 10% lifetime annuity. Find out what the penalty free withdrawal provision is before you buy the annuity.

4. Are there any other circumstances that would waive the surrender fee?
Some annuities have provisions that allow you to access your money with surrender charges for unemployment or nursing home. Find out what the provisions are in your annuity before the purchase.

5. How will I earn money in the annuity?
This is one of the trickiest parts of an annuity. A fixed annuity is pretty simple. You receive a fixed interest rate for the guaranteed period at which time it will adjust to the new fixed rate.
Equity Index Annuities are tied to the "Index" for examples the S&P 500 and a formula is used to calculate the gains. Make sure you understand the formula. It is really important that you understand how this product works if you plan on buying it. In specific ask about crediting method, participation rates and cap rates.
Variable annuities are linked to a managed portfolio and get credited the same way that any equity base product works similar to mutual funds.

6. Are there any limitations on what I can earn?
This is really very important for Equity Index Annuities that have caps on the amount that you can earn in one year and participation rates. Make sure you understand these before you buy.

7. How does the Death Benefit work?
If you die what happens to the annuity? Do your heirs have to annuitize and take their inheritance as a stream of income or can they receive the cash? If the annuity goes down does the death benefit still pay the higher amount. Find out the death benefit of the annuity.

8. Do I have to annuitize to gain the full benefit of the contract?
When you have passed the surrender period can you get the gains? Some companies force you to take your money as a stream of income. Make sure there are no strings at the end of the surrender charge.

9. Why is this strategy better for me than another one?
With so many annuities out there. Find out why your representative has picked this annuity. There are a lot of good answers. If you see a deer in the headlights look, you might want to continue shopping.

Annuities can be a great addition to a portfolio. They can create fantastic streams of income that a person can never outlive. Just make sure that the annuity is right for you.

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Steve Lover

Steve Lover is president of Senior Strategies a firm that helps seniors make better decision with their money. Visit their website www

Great tips to generate annuity leads

There are a few strategies you can use to create basic annuity leads obliging little exertion. Go for these strategies to create annuity leads and significantly expand deals.

1. Referrals.

Referrals are basic annuity drives which are not hard to create. Numerous specialists don't execute referrals as frequently as they ought to or have a tendency to keep down on pushing the referral course. Certainly don't be timid about approaching old customers for referrals. These can be laser focused on leads that you ought to seek after. You'll never know unless you ask. Deals can enormously expand executing referrals as a reliable lead producing strategy. Referral is the very common way to generate live annuity leads for agents.

2. Courses.

I think about going to as a course a positive course to straightforward annuity leads because of the information you will probably acquire in one evening. It's the information, as well as the activity outlook that you leave with. We can have lots of live annuity leads for agents through this . We can  Monday morning you'll be restless to make a move and actualize what you've realized for acquiring leads and producing deals. All from one evening responsibility.

3. Online Programs.

A significantly more straightforward course to take for figuring out how to create leads is downloading an online system which works in showing specialists how to expand leads and deals. Consider it, you don't even need to leave your home. Submit yourself to a couple of evenings at home contemplating a decent online lead era program, then begin executing the strategies and watch your business start to increment. Online projects ought to unquestionably be exploited, because of their comfort or more normal reputation for conveying results (projects vary, make beyond any doubt to pick one composed by a legitimate specialists).   

Annuity lead era is key to profiting all alone. Producing leads be that as it may, does not generally demonstrate simple. There are some mystery to the achievement of producing leads and staying away from the oversights that numerous make.

Those without client base, can utilize strategies, for example, mailings and telephone calls. One spot exceptionally prescribed is the Internet as an extraordinary source in building leads. On the Internet, you have incalculable open doors for methods for arriving at new leads. Also, there are a few administrations that can deal with the contact to discover drives that are of better quality.

When you begin to fabricate the leads, never forget to keep up those leads. Always you will need to fabricate to those leads too, with the goal that you generally have new and new material for prospects. Those new to annuity lead era will probably not have earlier clients that they can work with, so it may make things a little harder.

Exploring and the ownership of expertise are basic when you are attempting to produce leads. Considering this, you need to know your potential prospects. On the off chance that you as of now have a client base, then this ought to be a great deal less demanding, since you can allude to the data that you as of now have keeping in mind the end goal to figure out things, for example, their age and where they live, alone with the wage that they make. On the off chance that you can't get it off that data, then you can likewise take a gander at any more established data that you have which will give you the same sort of data in respect to who will be who the cash to contribute.

You ought to likewise make an arrangement on how you are going to achieve potential customers. Direct mailing are useful for rundown that you might as of now have that have demonstrated to function admirably previously. Also, you could put a commercial in the daily paper. One thing to recollect, technique is key as to the position of your promotion. The publicizing that you do ought to achieve the target showcase that you wish to address.

Bulletins or Magazines that are neighborhood inside a territory that you have had accomplishment with previously, additionally serves to deliver clients. Something else that does not damage, is to work with Attorneys and CPA's to help with developing your client base. Publicizing however is vital when you need to draw clients. So these are the best tips to generate live annuity leads.