by Structured Settlement Watchdog
A interesting blogger called Savvy Scot, chronicles life abroad (now lives in Scotland, got married in Thailand on the beach…). I'll be "sporran" you the details which you can read for yourself if you wish. Aye, but Savvy Scottie has strayed off kilter in a random effort about selling structured settlement payments. Let's give it a wee shoogle shall we?
What Savvy Scot Claims About Structured Settlements
"Once you sell your structured settlement, you assume no risk
I'd tuck into a nice Finnan Haddock over selling a structured settlement for mere pennies on the dollar
When the funding source buys your income stream, they assume your risk too. You need not worry even if the payer defaults or goes bankrupt; it is not your headache. You are not answerable to anyone in such circumstances and no one can come back to you"
Analysis
- Insurance companies cannot file for bankruptcy, but they can become insolvent. "Insurance is monitored and regulated by state insurance departments, and one of their primary objectives is protecting policyholders from the risk of a company in financial distress. When a company enters a period of financial difficulty and is unable to meet its obligations, the insurance commissioner in the company’s home state initiates a process—dictated by the laws of the state—whereby efforts are made to help the company regain its financial footing. This period is known as rehabilitation. If it is determined that the company cannot be rehabilitated, the company is declared insolvent, and the commissioner will ask the state court to order the liquidation of the company" The Insolvency Process (nolhga.com)
- If you sell your income stream you are certainly going to lose money, the question is "how much?".
- By selling your income stream for what typically amounts to pennies on dollar you are assuming a risk.
- If you sell for a pile of pennies on the dollar, it follows that you start off behind where you were before you sold.
- If you invest that money you are likely going to have to accept a greater investment risk than if you kept the structured settlement payments.
- Do you really think that the risk of New York Life (born 1845), the oldest living life insurance company writing structured settlement annuities today, going out of business is worth a trip to "pennies on the dollar heaven". See New York Life Insurance Company Structured Annuities (4structures.com). New York Life is almost as old as Jonathan the Seychelles tortoise (born 1832), who at nearly two cenuries old, is the oldest living land animal. Meet Jonathan The Tortoise, The Oldest Land Animal In The World (allthatsinteresting.com)
Reality Check
Last updated February 15, 2025