|
:
Structured
Settlements Information :
Annuity Transfer and the Risks
by Amit Laufer
Many people who know in the back of their minds that they
got the possibility to transform a monthly payment or annuity
long term payments into a big lump sum and by that to relieve
some temporarily financial problems, or need to buy a new
car or a house or help their children and so forth are tempted
to exercise this process into action. Although it is a very
natural feeling and sometimes even a real life need or deep
inner quest for power and control, it is not in their best
financial interest to say the least.
It is no wonder that the U.S federal laws encourage long term
payments in both cases like Structured settlements and lottery
winnings. There are many good reasons for that and I'm going
to spell them out as clear as I can.
- In some countries around the world it is legal to pay for
lottery winning in one lump sum. Experience shows many of
these people lose most or all of their money in a few years
Time, due to the following reasons:
- Ordinary people who get into their possession a very large
sum of money don't really know how to manage their treasure
or how to invest it wisely, they are not prepared for it and
they are overwhelmed with a delusion of over abundance of
wealth, they become totally careless on how and on what they
spend their money.
- Even if they invest their money, they go to high risk speculative
investments as they try to get high yields. Instead of going
for a much solid and safer, "widows & orphans"
type of investment portfolio. Neither do they go for the golden
middle way in between of a mixed portfolio. They don't use
investments advisers or financial consultants.
|
Also
read:
• Premium
Financing Hedge Uncertainty
Affluent insureds can use leverage to buy life insurance
using recourse and nonrecourse premium financing. After
two years, the coverage may be sold as a Senior Life
Settlement, or retained.
•
Presettlement
Funding Could Help Injury Victims
It
is a new service that can help injured parties while
in litigation. This service can provide cash to injury
victims for living expenses or to complete the lawsuit,
and is non-recourse.
|
- They become over generous with their family and friends,
they buy their children homes, cars or any other materialistic
requests, they "lend " money to a friend in need...
- They listen to shrewd business people who talk them into
investing into all kinds of business adventures that seems
to them very profitable but in a short while turn into total
failures and the money is gone.
- Believe it or not but criminal elements might engage in
putting pressure to extort monies from the overnight rich
poor guy. They might threaten to harm his family etc'
- Charity institutions start to call all day and night asking
for donations to a very noble causes, they even send some
slick reps to convince him to donate money.
- His own children, some times his spouse becomes very greedy
and exert emotional pressure to give them more and more money.
In some cases the sudden riches literally ruined the families.
As I have shown you above, getting a large lump sum of money
might be a risky thing, this is In addition to the fact that
you are loosing a lot of money which was Tax free, that alone
might be a difference of anywhere between 35% - 65% , add
to it the profits of the fund who bought the anuity from you
and you are loosing big time. It is not recommended for an
injured or a disabled person, to transform the whole Structured
Settlement long term payments into one big lump sum or you
might find yourself one day without the money and facing high
medical expenses and other bills you cannot afford.
About the Author
About Me Name:Amit Laufer Age: 46 Location:New York, United
States MBA - International Trade & Finance - Heriot-Watt
University. Bsc. Computers and Information Systems - Long
Island University - C.W Post Campus. Hobby: Photography. Married
with two Children.
Editor: http://annuity-structured-settlements.blogspot.com/
annuitty, annuitie, anniuty, annuities
|
