What really fascinates me with the structured settlement investment is the steady stream of income, which comes surely like a local train. There will be no risk factors, if you have remembered to check the background of the paying company, which is usually an insurance company.
Of course your profit targets are important, but I am sure you will also set value on the low risk feature of the structured settlement investment. During the deal process, the main thing is to get the program with the bargain price.
1. Who Sells These Programs?
This market is a special market, where certain brokers operate. The job of the broker is to find a buyer for the settlement program, which is for sale. The brokers can also guide, how the court will handle certain things during the process. This is important, because these deals involve a lot of working hours and if the court would reject the deal, the investment in time would be lost.
2. The Federal Structured Settlement Act – What Is That?
Most investors, who want to invest into settlements do not know, that the federal law regulates these deals a lot. The Federal Structured Settlement Act was issued in 2002 to regulate actions against unhealthy practices of some companies, which offered cash for the settlements. Before the deal is closed an investor has to make pre-contract disclosures about the key things in the deal. Every time an investor wants to make a structured settlement investment, he has to get the court acceptance.
3. Why The Calculator Is Useful?
The calculator helps to count, how much some future payments has value to-day. But before you start to calculate, you have to know, whether the settlement is paid for some fixed time or for the life of the accident victim.
The investor will pay less for the latter versions. With the help of the calculator you can easily calculate the present value of the program. After that you have to use a certain discount factor to make the investment profitable. An industry standard is to offer 60 – 70 % of the net present value of he program.
4. Be Cautious.
All in all, the investor must be cautious. The settlement investment is a god deal, when an investor knows in advance the legal and financial facts. And you have to learn, how to use the calculator to get the present value of the program. If you have small experience, get an expert guidance.
