Working from home has its benefits. One such benefit is being able to see the horrible TV ads that run during the morning newscasts. While I don't tend to watch, the TV is usually on and serves as background noise.
The worst offenders have to be the lump-sum-payment-for-structured-settlement spots. What, you may ask, is a structured-settlement commercial?
It's my money, and I need it now! Yes, the J.G. Wentworth, Stone Street Capital, and Peachtree Financial ads. These spots seem to run nonstop and always get on my nerves, though a recent viewing made me wonder just how lucrative the structured-settlement market is.
First, though, what is a structured settlement?
A structured settlement is defined as an agreement between you and another party that gives you a certain number of payments over a specified period. Usually, it is the result of a lawsuit or insurance claim, and the terms of the agreement stipulate once you're paid, you release the other party from any further liability in your case.
Other types include lottery winnings and disability payments.
Most structured settlements are tax-free and provide payees a steady income over a long period of time. Companies willing to buy your structured settlement gain tax-free income over a period of years, and take a commission off the top, sometimes as much as 40 percent.
Once you're paid a lump-sum settlement, Uncle Sam steps in to take a share. Although the commercials seem to imply a lump-sum payment is just a phone call away, the truth is the process is monitored by the courts and restructuring a settlement is neither quick nor easy.
The first hurdle for the payee is to prove a dire need exists for a lump-sum payment. If there isn't one, the process never gets started.
Why all the hoopla? Although the total amount of money tied up in structured settlements is not known, the market grows by roughly $6 billion yearly. In 2007, it was estimated 35 million separate structured settlements existed. Thus, it's quite the lucrative business.
Do the commercials work?
J.G. Wentworth, the largest purchaser of structured settlements (as well as the cheesiest advertiser), has handled over $2 billion over the past 15 years, and they've stated business has steadily increased since the recession began. Go figure.
To capitalize on circumstantial misfortune is America at its finest!