by Structured Settlement Watchdog®
Time to break out the BS spray for structured settlement misinformation written on behalf of Springfield, Missouri based Ozark Funding by Derek Wrend – listed as a community and marketing manager at Ozark Funding who guest blogged on planwise.com last year. Apologies for only sniffing it out just now. Download Who-actually-makes-a-profit-from
Ozark "Another obvious advantage of cashing out your structured settlement today is that it allows (you) to eliminate any possible risks of breach of contract. In accordance with the terms of your settlement agreement, an insurance company undertakes to make you regular payments. The truth is that insurance companies rather often tend to draw back payments and even pull out in spite of court orders. You can never be absolutely confident that your particular company won’t go this way".
Comment: Where is the proof of this cynical, uninformed nonsense? Should consumers be more worried about regulated insurers that may be over 150 years old or the unregulated secondary market that has been beset with recent news of forged court orders involved in New York structured settlement factoring ("cash now") transactions and forum shopping? If insurers really did pull out of contracts consumers would have a resource with state regulators and be able to verify.
Ozark: "There is one more trump card that insurance companies typically use to hold their clients from selling structured settlement payments – an interest fee that annuity and settlement buyers take for their services.
Comment: Insurance companies issuing structured settlement annuities do charge a processing fee to a structured settlement transfer company. It is not interest however, it is generally a flat fee. Are structured settlements transfers a contractual right? Given that less than 10% of annuitants sell their structured settlement payment rights, the insurers charge a fee to cover the costs of assuring compliance with structured settlement protection acts.
Ozark: "Do you really know how they (insurers) manage your entire money stream while you get only small partitions every month or, what’s worse, quarter or year? The truth is that insurance companies use money that is enclosed in structured settlements, annuities, insurance settlements and some other related financial agreements to invest it into various high-profit fields".
"The volume of capital that every insurance company manages, even the small one, is really tremendous. And as you certainly know, money makes money. There are multiple investment opportunities that insurance companies take advantage of to earn money, but mostly they opt for stocks and investing into businesses that have significant growth potential and can be further sold for a higher price".
Comments: The promises contained in an insurance contract are only as good as the financial strength of the insurance company that is backing that promise. It is desirable for an insurance company to be profitable, particularly when you are insuring long term obligations. It is not only important for the insurer to be profitable but to have a track record of being profitable. "Enclosed in a structured settlement"?
Ozark "If money is legally yours, why should you allow a third-party company to derive all the benefit from it? Bank deposits, stocks, mutual and hedge funds, starting up your own business or perhaps investing into real estate – with a large amount of cash at hand you can easily enter any of these excellent financial opportunities to enjoy steady income".
- With a structured settlement you agree to a stream of future periodic payments. The terms of the periodic payment obligation are set out in the contract you sign (settlement agreement and assignment agreement) in such a way in order for you to enjoy the tax status of the future payments.
- The insurance company does not "derive all the benefit from it", how else would they pay you anything? DUH!
- Aren't banks, corporations that issue common stock, mutual funds and hedge funds each a "third-party company"? DUH!
- Do hedge funds guarantee steady income? Compare the average size of case for a person selling a structured settlement to the minimum investment in a hedge fund.
- Do banks, mutual funds and hedge funds charge fees, or do the licensed individuals that sell them make a commission? Where is that covered in Ozark/Wrend's article?
If you're going to turn out trash, expect the "bash". It doesn't take much to do a modicum of research and present accurate information about structured settlements.