When you purchase structured settlements in a normal setting, a broker will be in charge of handling the deal between you and the seller. The most important fact to remember is that the annuity settlements received are higher compared to those made from certificate deposits, the municipal and the corporate bonds among others.
Why You Should Not Buy From Insurance Companies
While it is possible to purchase structured settlements from an insurance company, it is important to note that these are backed by the insurance company. As such, the brokers are responsible for arranging and designing the sales charge as well as the commissions. For this reason, you will be offered low profits and this will be a sour deal for you.
Why You Should Purchase Them
The yields from making this purchase are among the benefits that make it an ideal investment. In most instances, it is even higher than that of fixed rate investment. As a buyer, you also stand to enjoy a fixed income over certain duration and the settlement is reached by the insurance carrier you choose. It is ideal to ensure that they are rated. In this case, it is also ideal to note that the broker is not at liberty to process the contract. Instead, the buyer gets an agreed settlement payment via the seller. This is done through a court approval and the payment will be delivered directly through the insurance company.
The Broker
To purchase structured settlements and make the process legal, a court decision is needed. Therefore, the role of the broker is to ensure that both parties understand the terms and to guide them through the process. Therefore, they are not at liberty to receive, hold or claim payment rights on part of the investor.
Research
Before making your investment, make sure that you research on the insurance company. This is important since research has proven that even well established companies can face economic hardships. Since it will be a long term investment, ensure that it is a stable one.
