Things You Should Know About Structured Annuity Settlement

Structured Annuity settlements compensate victims of personal injury, wrongful death, or workers’ compensation lawsuits.

Structured Annuity settlementscan be referred to as an innovative and proven method of compensating injured plaintiffs in legal settlements.

Infoexpert24 understands that in the case clients choose Structured Annuity settlement, it implies that rather than receiving one lump sum, structured settlements payout over time as a stream of tax-free payments.

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A Structured Annuity settlement is a good option for those looking for guaranteed financial security for future expenses.

A plaintiff may choose a structured settlement annuity because it seems like a more attractive payment option than a lump sum at the time of their award. However, as their circumstances change, especially as they face expenses from their lawsuit, such as medical bills, their needs may change.

The periodic payments paid to an injured party by the defendant primarily through the purchase of an annuity (fixed and determinable) issued directly by highly-rated life insurance companies.

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Annuities are insurance policies that behave like investments. It offers a hedge against something bad happening to your money, like a huge loss in a stock market collapse. Instead of personally managing your money and assuming risks inherent in stocks and mutual funds, you buy an annuity that guarantees a steady monthly income for decades or even a lifetime.

Reasons why an individual may receive a structured settlement:

1 Personal Injury: A personal injury case is a civil case where someone who’s been harmed files a lawsuit seeking money from the person believed responsible for the harm. Money in the form of a structured settlement helps recipients pay for medical expenses or other costs.

2 Workers’ Compensation: Most people know about workers’ compensation, which pays workers who get injured on the job while they recover. Payments can be used as wage replacement or to pay for medical treatment

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3 Medical Malpractice: In some unfortunate cases, doctors can do more harm than good. In this instance, injured patients or the families of deceased patients can sue for medical malpractice.

4 Wrongful Death: A structured settlement is also a common way to compensate family members who claim loved ones were victims of wrongful deaths. Families may be entitled to receive a stream of tax-free payments to replace income after a loved one’s death.

Types of Annuities

Many people choose a payout through a structured settlement annuity because of the potential that the investment will yield more money than they would have received otherwise. Of course, like any investment, there is always the chance that the investment will not pay off or that it might actually lose money, depending on the type of annuity that’s available.

A fixed annuity usually carries the least risk. It will pay out a guaranteed amount over time and will offer an investment yield similar to a bank savings account.

A variable annuity is based on the performance of the stocks in mutual funds that the plaintiff chooses for their account. A variable annuity offers a higher potential than a fixed annuity but it also carries a greater risk.

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An indexed annuity is tied to the performance of a stock index like the S&P 500. These usually perform better than fixed annuities, but don’t have the same potential for payment as variable annuities.

What to Consider When Choosing a Structured Settlement

A plaintiff will want to consider:

1 How much they’ll need at one time

2 When they think they will need it

3 How they plan to use the money

4 Whether the structured settlement annuity will replace their income

5 Whether they have the expertise to manage a large sum

6 Whether they can have access to additional amounts as needed

7 Whether there are tax consequences