Often, when a client is in the process of completing a structured settlement transfer, they will be informed that their insurance company “will not split payments.” What does this mean?? Well, it means that you are most likely not selling your entire monthly payment (ex. You receive $1,000.00 a month but you are only selling $500.00 a month) but your insurance company will only agree to write one check per month. If this is the case, it presents a problem because if the insurance company only writes one check, either you or the buyer will not get their portion of the monthly or lump sum payments. In order to complete the deal, two checks will need to be issued, one check going to you and one check going to the buyer of your structured settlement payments. This is where a servicing company comes in.
Servicing companies are set up to service the checks from the insurance company. When your insurance company will not write more than one check or “split your payments”, the servicer is hired to do so. They will serve as a 3rd party who receives the full monthly or lump sum payment and then takes that check and disperses it according to your agreement. So they may take the check and send half to you and then the other half to the buyer of your payments. Regardless of how the check is split, they will take care of making sure that all individuals that are entitled to a portion of that one check receive their actual portion.
This is a great service and extremely regulated so you do not have to worry about whether or not you will receive your payments if they are being serviced. The 3rd party servicer will take care of all the hard work and ensure you receive the remaining portion of your monthly or lump sum payments.