Text Ads

Structured Settlement Annuity:How It Works And All You Need To Know

Do you feel you have been cheated and you think you know the cause was buy a person or an organization. Are you willing to take legal charge against such person or organization? And you reside in the United States, In Canada, In United Kingdom and Australia, then you have to thoroughly read and digest this post.


Before any other thing, I will need to discuss at length what structured settlement annuity is.


What is a Structure Settlement?

Structure Settlement is a negotiated financial or insurance arrangement by which the claimants agree to resolve a personal injury tort claim by receiving part or all of the settlement in the form of periodic payments on an agreed schedule instead of a lump sum.

It looks confusing and you don't get it, let me at first break down some words there -
  • Tort - A civil wrong which causes someone else to suffer loss or harm resulting in legal liability for the person which causes the act.
  • Claimant - One, who claim to have been negatively affected by the act.
  • Lump Sum- A payment made one.
Still don't get? Now let me give this illustration,

Say, I work in an asbestos company, which automatically made me a victim to mesothelioma cancer, once I am diagnosed of the cancer, I can arrange a personal injury lawyer to help me fight my case against the company, and say  I won the case, the company and I will have to come to an agreement on the amount I want to charge, which will be paid for a period of time without failure in time of pay. 

After the agreement, the at-fault party(the company) instead put the money toward an annuity, which is a financial product that guarantees payment over time from an insurance company.

The structured settlement will now Send the details of the amount to be earned by the harmed party(me) as compensation. And the payment will be arranged to be paid over a period of time which offer a better future plan. 

But if it's a small amount, then the recipient may request to make it a lump sum.

How Does Structured Settlement Works?

Like the explanation above, structured settlement pays out money that's owned Via a legal settlement through periodic payment in a financial plan known as annuity.

When Do You Use Structured Settlement?

When you feel you are being cheated and you plan to settle it in a peaceful manner. They are commonly used in cases ike


Personal Injury : In this case, rather a civil one, when the person harmed files a case for money from the person who he/she claims to have injured him/her.
Such money generated are used to pay for treatment and other expenses. 

Medical Malpractice : This case, when a doctor makes a mistake that harms a person, such person or the family of the deceased may file a case against the doctor for medical malpractice.

Wrongful Death :Suppose a person was wrongfully killed, structured settlement is another way to compensate such family member.

And also the example I gave may also be dubbed workers compensaton. 

Advantages And Disadvantages Of Structured Settlement. 
Here are some pros and cons you need to know before you choose Structured Settlement,


Advantages

  • Most structured settlement payments is tax free
  • In the case of unexpected death, the next of kin continues to receive payments 
  • Spreading the payment will surely guarantee future income 
  • It's better compared to lump sum because of the interest it will generate. 
Disadvantages 
  • Once everything has been agreed, it cannot be altered again
  • You funds are not accessible in case of emergency 
  • Some part of the payment like the attorney fee can be taxed. 
With all written, I hope it enlighten you more about Structures Settlement Annuity. 

Structured Settlement Annuity:How It Works And All You Need To Know Structured Settlement Annuity:How It Works And All You Need To Know Reviewed by Nathaniel Peter on January 25, 2018 Rating: 5
Post a Comment
'; (function() { var dsq = document.createElement('script'); dsq.type = 'text/javascript'; dsq.async = true; dsq.src = '//' + disqus_shortname + '.disqus.com/embed.js'; (document.getElementsByTagName('head')[0] || document.getElementsByTagName('body')[0]).appendChild(dsq); })();
Powered by Blogger.