Have you been involved in a personal injury case?
No matter which side of the legal spectrum you’ve fallen on, it’s important to understand how different types of settlements play out. In this post, we’re going to be discussing structured settlement annuities, which are put in place to pay the plaintiff over a set period of time, rather than with a lump sum.
We’ll go over why these settlements are sometimes used, then tell you what you might expect from a structured settlement. These kinds of civil cases can be overwhelming, so pay attention and we’ll get you through it with a greater understanding.
When Structured Settlements Come Into Play
Breaking down a structured settlement is easy. When a civil case comes to a settlement, one party is usually ordered to pay another party. Sometimes this comes in a lump sum, but many times it’ll come in the form of many smaller payments over an extended period of time.
These usually come about when the sums in question are larger. They’re meant to benefit the victim, in the event that they have ongoing expenses or loss of income due to their injury. Instead of getting all of the money at once, you’ve got the option of making up some of that lost income and/or covering your medical expenses.
The most common examples of structured settlements come from personal injury, workers compensation, medical malpractice, and wrongful death cases. It’s important to remember the choice is yours when it comes to getting a structured settlement.
Structured Settlement Annuities Explained
Deciding on a structured settlement is a big move with lasting implications for everyone involved. You can decide to start receiving the funds immediately or at a later date, which will allow the payments to garner interest before your receive them. Most of the time, however, there are pertinent expenses that need covering.
Once you’ve decided on a structured settlement, you’ll have to figure out the annuity with the insurance company. You can choose a period certain annuity, which gives you payments over an agreed-upon number of years. They’re usually monthly payouts and go on for the duration of the term.
A life annuity is paid out over a longer period of time, potentially the rest of your life. The main different between a period certain annuity and a life annuity is that a beneficiary can receive the payments in the event of death. For this reason, it’s the most common option for structured settlements.
Another thing to consider is that when you decide on your annuity, it can’t be changed. Fortaunately, there are companies that allow you to exchange annuity payments for lump sums, if a financial emergency comes up, but you have to be careful not to get scammed. Check out Rightway Funding on Yelp to see a company that’ll do this in an honest way.
How to Work With a Structured Settlement
Lump sum settlements are risky for many reasons. If you want your personal injury settlement to really help your situation, go with one of the structured settlement annuities that we talked about.
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