Structured Settlement

In this article, I will discuss with you very specific aspect of structured settlements -- annuity payments. We will go over the general information about what you need to know regarding structured settlement annuity payments. This article is designed to help you to make more informed decisions regarding your annuity payments, but having useful information available to you.

Structure settlements occur when a plaintiff brings a case to a court of law, and is awarded compensation. If they decide to receive this compensation in periodic payment installments, instead of in one large sum, then they have set up a structured settlement.

And annuity payment is a term that is used to describe a payment that occurs over time. When you set up a structured settlement, you have many different options that can be negotiated, as far as the annuity payments are concerned. For example, let's say you received a settlement for $100,000.

Part of the reason you were awarded a settlement was because you suffered bodily damage, which landed you in the hospital for quite some time. You have a large hospital bill to pay -- $10,000. Now, you think you have to receive the payment of the settlement in one sum, so you can pay off your medical debt. Otherwise, how are you going to pay it off smaller monthly installments?

An option you have available is to structure the settlement to receive one large payment up front, followed by regular structured settlement annuity payments. For example, you get $10,000 up front, to cover your medical expenses, and the rest of your $90,000 to be paid out through the structured settlement annuity payments.

On the other hand, let's say five years down the road you need a large sum of money, but have set up a structured settlement agreement. You can sell off your future structured settlement annuity payments, in exchange for receiving the rest of your settlement in one large sum.

Of course, if you exercise this option, there are some tax and inflation implications involved as well. Because structured settlement annuity payments factor in inflation over time, it will have to be discounted if you sell your structured settlement annuity payments.

In conclusion, I have given you information on some different options that are available to you, regarding your structured settlement annuity payments. It is wise to know these options, so you can make better decisions on how you receive your structured settlement payments.

Structured Settlement |