Debt, Structed and Life Insurance Settlements

2007-03-08 10:33:40

( Financial )



The first type of cash settlement is life insurance settlement. Life insurance settlements are also commonly known as senior settlements. Life insurance settlements are contracts where the original policy holder has decided to sell his insurance for a portion of the actual value of the policy. The person who will buy the policy will pay off the premiums left and the buyer gets the benefits of the policy when he dies. Life insurance settlements usually happen when the original policy holder needs to liquidate his assets into cash due to a drastic change in his circumstances.

Bear in mind that if you are considering this type of settlement, your insurance carrier prohibits you from selling your policy if you are already diagnosed with a terminal ailment.

The second type of cash settlement is called the structured settlement. Structured settlements on the other hand, are contracts between the insurance company and an injured party. The contract would require the insurance company to pay set amounts via an installment schedule. These amounts are paid to the injured consumer or in cases of death, to his surviving members of the family.

While most injured parties would prefer cash rather than structured settlements, scheduled payments may be more advantageous to the injured party. A structured settlement would guarantee that the injured party receives period payments. It is almost similar to having your own steady income. This is beneficial especially if your injury requires treatment over a long period of time. It is also beneficial if the injured party is a child or has children as these payments can help in their education.

The last type of cash settlement is debt settlement. Debt settlements refer to a plan initiated by a settlement agency to help you in managing your debts. This agency acts as a mediator between you and your creditors. They create a debt management plan for you. You forward your monthly payment to this agency and they will be the one to negotiate better rates and pay your creditors.

Before choosing a debt settlement agency, choose a company you are comfortable with. Do your research and compare with other settlement agencies available in your area. Most agencies charge a monthly fee for their services. Some agencies also charge a monthly maintenance fee apart from the service fee. Make sure you know what you are paying for.


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