The term "title insurance" is a combination of two words: title and insurance. To understand it better, first we understand what is meant by "title". The term "title" is used to refer for a person who has got a legal right to use, own or sell a property. The title contains all the brass tacks related to previous ownerships, transfers, mortgages, easements, etc.
Why it is important?
A problem in the title could result in a fail transaction - your ownership could be questioned. A problem in the title can arise due to various reasons, such as, lien, unpaid taxes, earlier forged transactions, etc.
It is vital to have the insurance policy so that the owner would remain safe from any kind of the title related problems. Thus, every mortgage lender requires a title insurance policy to avoid any future disputes on the title of a property.
How it works?
It provides a protection against financial losses in the title of a property. It will fight for the insurance holder in case of any lawsuit, and would reimburse him/her in case of financial losses.
Before issuing the insurance policy, every company does in-depth research to detect, prevent and eliminate any sort of a problem in the title of a property.
Insurance Premiums
It is important to understand that title insurance for a lender is different from the insurance of a buyer. Generally, the buyer is responsible for the one-time premiums of both the policies, but in some states, the seller is responsible for the one-time premiums of both the policies. It is suggested that buyers must discuss this issue with their real estate agents.
Further, it requires only one-time premium and covers the tile as long as the policy holder owns the property.
How it is Different from Other Types of Insurances?
Title insurance is different from other general forms of insurances as it covers the losses that arises due to the events occurred prior (indefinite period) to the date of the issuance of the policy. On the contrary, in a life insurance or property insurance, the upcoming losses from the date of the issuance of the policy are covered for a definite period.
Title insurance is mandatory for every lending organization. It is a highly recommended insurance for every buyer. Although, it looks as an upfront expense, but in case of any dispute in the title of a property, it works as a savior.
Jumat, 24 April 2009
Cash For Structured Settlements: I’ll Get It When?
If you want cash for structured settlements right away, you should know that finalizing the deal and actually getting your money could take some time. In many cases, it will take from 60 to 90 days to actually receive your funds.
The delay is caused by the approval procedures that must be followed. However, you probably shouldn’t make decisions like this overnight. Let’s take a closer look at the timeline of receiving cash for structured settlements so you won’t be surprised by a normal delay.
Everyone is probably familiar with JG Wentworth’s television ads that have people shouting, “It’s my money and I need it NOW!” Although that sentiment may be true, you may have to take a little literary license with the word “now.” Transactions to get cash for structured settlements take some time. If everything goes perfectly, you’re probably looking at four to six weeks of waiting for the cash. The more typical timeframe is 60 to 90 days between initial contact and delivery of the check.
To be perfectly honest, the usual holdup is on the governmental side of the equation. Let’s say you contact a firm that provides cash for structured settlement on Day One. With the use of express courier companies and allowing a minimum amount of time for thinking, you can probably hammer out a deal in about a week. But after that, the paperwork is handed off to an attorney who must run it through a series of government mandated hoops.
You see, the structured settlement was originally designed to be in your best interest. The state and federal governments want to make sure the new setup is equally beneficial for your financial affairs. So everything you do with the potential buyer must be approved before it can happen. Waiting for government or court approval usually accounts for 75% to 90% of the wait time.
However, you shouldn’t fault the courts or government agencies. Turning your structured settlement payments into cash is a big move and not one to be taken lightly. You will be giving up guaranteed tax-free income in exchange for a one-time cash payment. Once that’s done, management of your financial affairs will be completely up to you.
As you can see, there’s a good reason why getting cash for structured settlement payments doesn’t happen in a day. Count on anywhere from 30 to 90 days to receive your cash. Most of this time is taken up in the governmental approval process. But you should allow the process to work so that you can be sure this significant decision is the right one to make.
The delay is caused by the approval procedures that must be followed. However, you probably shouldn’t make decisions like this overnight. Let’s take a closer look at the timeline of receiving cash for structured settlements so you won’t be surprised by a normal delay.
Everyone is probably familiar with JG Wentworth’s television ads that have people shouting, “It’s my money and I need it NOW!” Although that sentiment may be true, you may have to take a little literary license with the word “now.” Transactions to get cash for structured settlements take some time. If everything goes perfectly, you’re probably looking at four to six weeks of waiting for the cash. The more typical timeframe is 60 to 90 days between initial contact and delivery of the check.
To be perfectly honest, the usual holdup is on the governmental side of the equation. Let’s say you contact a firm that provides cash for structured settlement on Day One. With the use of express courier companies and allowing a minimum amount of time for thinking, you can probably hammer out a deal in about a week. But after that, the paperwork is handed off to an attorney who must run it through a series of government mandated hoops.
You see, the structured settlement was originally designed to be in your best interest. The state and federal governments want to make sure the new setup is equally beneficial for your financial affairs. So everything you do with the potential buyer must be approved before it can happen. Waiting for government or court approval usually accounts for 75% to 90% of the wait time.
However, you shouldn’t fault the courts or government agencies. Turning your structured settlement payments into cash is a big move and not one to be taken lightly. You will be giving up guaranteed tax-free income in exchange for a one-time cash payment. Once that’s done, management of your financial affairs will be completely up to you.
As you can see, there’s a good reason why getting cash for structured settlement payments doesn’t happen in a day. Count on anywhere from 30 to 90 days to receive your cash. Most of this time is taken up in the governmental approval process. But you should allow the process to work so that you can be sure this significant decision is the right one to make.
How To Sell Structured Insurance Settlement For a Large Lump Sum of Money
Recipients of monthly payments may not be aware that they may sell structured insurance settlement payment rights to organizations that can, in return, provide a lump sum of cash to be used by the seller immediately. Although the promise of regular payments through a structured settlement may sound appealing at first, many recipients find that having access to cash, even if it amounts to less than the total annuity payment over time, is a better deal.
People who decide to sell structured insurance settlements do so to have money at their immediate disposal, rather than to have to wait for expected payments. The lump sum payout is basically a cash advance that can be spent as needed or saved or invested for future use. People who decide to sell structured insurance settlement payment agreements find that having access to cash at one time can pay off debt, cover unforeseen medical and education expenses, allow for large purchases, and even treat the family to a dream vacation.
Some people choose to use the additional cash to take advantage of investment opportunities that might yield more money over time than the settlement offered. Regardless of what they decide to do with the money they receive, people who sell structured insurance settlements regain control of the money awarded to them and are able to do with that money what they choose in the present, rather than having to wait years for the series of payments to arrive.
Those choosing to sell will want to do some research to be sure they get the most out of the transaction. Reputable buyers offer many options to sellers and can customize agreements to suit individual needs since no two arrangements are alike.
How Do I Start the Selling Process?
If you decide you want to sell structured insurance settlement payments to a buyer, you should first find out what types of programs are offered. Understand that when you sell a structured insurance settlement, you will receive less money than was awarded to you originally; however, that money will immediately be yours to do with as you please.
And don’t forget that due to the natural flow of inflation, structured set payments are actually worth less over time. This is why it makes sense to get a lump sum now. A reputable buyer will also suggest that you consult an attorney and have him or her look over the agreement you are planning to make with the buyer.
Whether you decide to continue receiving periodic payments or to join those who have decided to sell structured insurance settlements, remember that the money was awarded to you, and you have options of when to receive your money and what you can do to make it work best for you.
People who decide to sell structured insurance settlements do so to have money at their immediate disposal, rather than to have to wait for expected payments. The lump sum payout is basically a cash advance that can be spent as needed or saved or invested for future use. People who decide to sell structured insurance settlement payment agreements find that having access to cash at one time can pay off debt, cover unforeseen medical and education expenses, allow for large purchases, and even treat the family to a dream vacation.
Some people choose to use the additional cash to take advantage of investment opportunities that might yield more money over time than the settlement offered. Regardless of what they decide to do with the money they receive, people who sell structured insurance settlements regain control of the money awarded to them and are able to do with that money what they choose in the present, rather than having to wait years for the series of payments to arrive.
Those choosing to sell will want to do some research to be sure they get the most out of the transaction. Reputable buyers offer many options to sellers and can customize agreements to suit individual needs since no two arrangements are alike.
How Do I Start the Selling Process?
If you decide you want to sell structured insurance settlement payments to a buyer, you should first find out what types of programs are offered. Understand that when you sell a structured insurance settlement, you will receive less money than was awarded to you originally; however, that money will immediately be yours to do with as you please.
And don’t forget that due to the natural flow of inflation, structured set payments are actually worth less over time. This is why it makes sense to get a lump sum now. A reputable buyer will also suggest that you consult an attorney and have him or her look over the agreement you are planning to make with the buyer.
Whether you decide to continue receiving periodic payments or to join those who have decided to sell structured insurance settlements, remember that the money was awarded to you, and you have options of when to receive your money and what you can do to make it work best for you.
Structured Settlements in the United States
The United States has enacted structured settlement laws and regulations at both the federal and state levels. Federal structured settlement laws include sections of the (federal) Internal Revenue Code[1]. State structured settlement laws include structured settlement protection statutes and periodic payment of judgment statutes. Medicaid and Medicare laws and regulations affect structured settlements. To preserve a claimant’s Medicare and Medicaid benefits, structured settlement payments may be incorporated into “Medicare Set Aside Arrangements” “Special Needs Trusts."
Structured settlements have been endorsed by many of the nation's largest disability rights organizations, including the American Association of People with Disabilities [2] and the National Organization on Disability [3].
In April 2009, financial writer Suze Orman wrote in a column [1] that structured settlements "provide ongoing income and reduce the risk of blowing a lump sum through poor financial choices." In response to a reader's question, she added that financial security can be improved "if you use the structured payouts wisely."
[edit]
Definitions
The United States definition of “structured settlement” for federal income taxation purposes, found in Internal Revenue Code Section 5891(c)(1) (26 U.S.C. § 5891(c)(1)), is an "arrangement" that meets the following requirements:
A structured settlement must be established by:
A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2) (26 U.S.C. § 104(a)(2)); or
An agreement for the periodic payment of compensation under any workers’ compensation law excludable under Internal Revenue Code Section 104(a)(1) (26 U.S.C. § 104(a)(1)); and
The periodic payments must be of the character described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c)(2) (26 U.S.C. § 130(c)(2))) and must be payable by a person who:
Is a party to the suit or agreement or to a workers' compensation claim; or
By a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with Internal Revenue Code Section 130 (26 U.S.C. § 130).
[edit]
Legal Structure
The typical structured settlement arises and is structured as follows: An injured party (the claimant) settles a tort suit with the defendant (or its insurance carrier) pursuant to a settlement agreement that provides that, in exchange for the claimant's securing the dismissal of the lawsuit, the defendant (or, more commonly, its insurer) agrees to make a series of periodic payments over time. The insurer, a property/casualty insurance company, thus finds itself with a long-term payment obligation to the claimant. To fund this obligation, the property/casualty insurer generally takes one of two typical approaches: It either purchases an annuity from a life insurance company (an arrangement called a "buy and hold" case) or it assigns (or, more properly, delegates) its periodic payment obligation to a third party which in turn purchases an annuity (which arrangement is called an "assigned case").
In an unassigned case, the property/casualty insurer retains the periodic payment obligation and funds it by purchasing an annuity from a life insurance company, thereby offsetting its obligation with a matching asset. The payment stream purchased under the annuity matches exactly, in timing and amounts, the periodic payments agreed to in the settlement agreement. The property/casualty company owns the annuity and names the claimant as the payee under the annuity, thereby directing the annuity issuer to send payments directly to the claimant. If any of the periodic payments are life-contingent (i.e., the obligation to make a payment is contingent on someone continuing to be alive), then the claimant (or whoever is determined to be the measuring life) is named as the annuitant or measuring life under the annuity.
In an assigned case, the property/casualty company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the property/casualty insurer transfers the obligation, through a legal device called a qualified assignment, to a third party. The third party, called an assignment company, will require the property/casualty company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation. If the claimant consents to the transfer of the periodic payment obligation (either in the settlement agreement or, failing that, in a special form of qualified assignment known as a qualified assignment and release), the defendant and/or its property/casualty company has no further liability to make the periodic payments. This method of substituting the obligor is desirable for property/casualty companies that do not want to retain the periodic payment obligation on their books. Typically, an assignment company is an affiliate of the life insurance company from which the annuity is purchased.
An assignment is said to be "qualified" if it satisfies the criteria set forth in Internal Revenue Code Section 130 [2]. Qualification of the assignment is important to assignment companies because without it the amount they receive to induce them to accept periodic payment obligations would be considered income for federal income tax purposes. If an assignment qualifies under Section 130, however, the amount received is excluded from the income of the assignment company. This provision of the tax code was enacted to encourage assigned cases; without it, assignment companies would owe federal income taxes but would typically have no source from which to make the payments.
Structured settlements have been endorsed by many of the nation's largest disability rights organizations, including the American Association of People with Disabilities [2] and the National Organization on Disability [3].
In April 2009, financial writer Suze Orman wrote in a column [1] that structured settlements "provide ongoing income and reduce the risk of blowing a lump sum through poor financial choices." In response to a reader's question, she added that financial security can be improved "if you use the structured payouts wisely."
[edit]
Definitions
The United States definition of “structured settlement” for federal income taxation purposes, found in Internal Revenue Code Section 5891(c)(1) (26 U.S.C. § 5891(c)(1)), is an "arrangement" that meets the following requirements:
A structured settlement must be established by:
A suit or agreement for periodic payment of damages excludable from gross income under Internal Revenue Code Section 104(a)(2) (26 U.S.C. § 104(a)(2)); or
An agreement for the periodic payment of compensation under any workers’ compensation law excludable under Internal Revenue Code Section 104(a)(1) (26 U.S.C. § 104(a)(1)); and
The periodic payments must be of the character described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c)(2) (26 U.S.C. § 130(c)(2))) and must be payable by a person who:
Is a party to the suit or agreement or to a workers' compensation claim; or
By a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with Internal Revenue Code Section 130 (26 U.S.C. § 130).
[edit]
Legal Structure
The typical structured settlement arises and is structured as follows: An injured party (the claimant) settles a tort suit with the defendant (or its insurance carrier) pursuant to a settlement agreement that provides that, in exchange for the claimant's securing the dismissal of the lawsuit, the defendant (or, more commonly, its insurer) agrees to make a series of periodic payments over time. The insurer, a property/casualty insurance company, thus finds itself with a long-term payment obligation to the claimant. To fund this obligation, the property/casualty insurer generally takes one of two typical approaches: It either purchases an annuity from a life insurance company (an arrangement called a "buy and hold" case) or it assigns (or, more properly, delegates) its periodic payment obligation to a third party which in turn purchases an annuity (which arrangement is called an "assigned case").
In an unassigned case, the property/casualty insurer retains the periodic payment obligation and funds it by purchasing an annuity from a life insurance company, thereby offsetting its obligation with a matching asset. The payment stream purchased under the annuity matches exactly, in timing and amounts, the periodic payments agreed to in the settlement agreement. The property/casualty company owns the annuity and names the claimant as the payee under the annuity, thereby directing the annuity issuer to send payments directly to the claimant. If any of the periodic payments are life-contingent (i.e., the obligation to make a payment is contingent on someone continuing to be alive), then the claimant (or whoever is determined to be the measuring life) is named as the annuitant or measuring life under the annuity.
In an assigned case, the property/casualty company does not wish to retain the long-term periodic payment obligation on its books. Accordingly, the property/casualty insurer transfers the obligation, through a legal device called a qualified assignment, to a third party. The third party, called an assignment company, will require the property/casualty company to pay it an amount sufficient to enable it to buy an annuity that will fund its newly accepted periodic payment obligation. If the claimant consents to the transfer of the periodic payment obligation (either in the settlement agreement or, failing that, in a special form of qualified assignment known as a qualified assignment and release), the defendant and/or its property/casualty company has no further liability to make the periodic payments. This method of substituting the obligor is desirable for property/casualty companies that do not want to retain the periodic payment obligation on their books. Typically, an assignment company is an affiliate of the life insurance company from which the annuity is purchased.
An assignment is said to be "qualified" if it satisfies the criteria set forth in Internal Revenue Code Section 130 [2]. Qualification of the assignment is important to assignment companies because without it the amount they receive to induce them to accept periodic payment obligations would be considered income for federal income tax purposes. If an assignment qualifies under Section 130, however, the amount received is excluded from the income of the assignment company. This provision of the tax code was enacted to encourage assigned cases; without it, assignment companies would owe federal income taxes but would typically have no source from which to make the payments.
Structured Settlement
A structured settlement is a financial or insurance arrangement, including periodic payments, that a claimant accepts to resolve a personal injury tort claim or to compromise a statutory periodic payment obligation. Structured settlements were first utilized in Canada and the United States during the 1970s as an alternative to lump sum settlements. Structured settlements are now part of the statutory tort law of several common law countries including Australia, Canada, England and the United States. Although some uniformity exists, each of these countries has its own definitions, rules and standards for structured settlements. Structured settlements may include income tax and spendthrift requirements as well as benefits. Structured settlement payments are sometimes called “periodic payments.” A structured settlement incorporated into a trial judgment is called a “periodic payment judgment."
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