Introduction to Structured Settlement Annuity Well, everyone knows the fact that millions of Americans get injured in accidents every year. If it is a minor or a moderate injury, such cases are settled with lump sum payments to the affected party. Serious injuries that require future medical treatment are also settled with structured settlement annuities. When anyone is hurt due to personal injury accidents or product liability, they certainly deserve an appropriate compensation amount and typically, these payments are paid over many years. To simply put, a structured settlement is nothing but a financial package, which allows court directed compensation to be paid regularly as a series of installments, instead a lump sum amount. These annuity installments can be paid over the lifetime of the recipient or for a fixed number of years.
Structured settlements are generally used to settle personal injury or other suits and each one is tailor made according to the individual cases. These are established for various different reasons, so as to take in to consideration, the possible future needs of the plaintiff and also to provide a steady and reliable source of income. It might be a car accident or even a bite from your neighbors dog or any other mishaps. It is a fact that the injured person often opts for compensation through structured settlement annuities and it provides for a stream of payouts over many years. Do you know that structured settlements are absolutely tax-free. The income received from such type of settlement annuities are not considered as taxable income and that makes it the most desirable feature.
Now, in case if you opt for lump sum payments, the interest accrued through investments, which is made from money received as lump sum, is subjected to state as well as federal taxes. Both the concerned parties, that is, the defendant and the plaintiff, prefer structured payments as they are settled without having the need to go to court. One has to anticipate the future financial needs, so as to find out how to structure your settlements, which will cover all the necessary expenses. Structured settlements come in the form of annuities that are sold by insurance companies and the payments are absolutely tax-free.
Understanding Structured Settlement Annuities
A Structured Settlement Annuity is basically an insurance policy, which provides for scheduled payments to a plaintiff in a lawsuit, purchased by the losing side. The person receiving the scheduled payments, as per the structured settlement is known as a payee or an annuitant. Usually, the structured settlement payment amount is broken down in to stream of scheduled payments, to be paid out over time. Such payments can range from monthly, yearly or to a variety of combinations, depending upon the agreement. A defendant purchases settlement annuity from an insurance company to settle a personal injury lawsuit and it is indeed an unfortunate type of payout. There are various products, so one has to be more careful and should get all the required information before making a choice. A settlement annuity is a particular type of annuity plan, as a result of a settlement over a personal injury lawsuit and can be structured to make payments for a certain number of years or for ones lifetime.
An individual has to consider the following factors when entering in to the settlement agreement, like the date when the payment begins, current age, and extent of risk in occupation, duration and retirement plans. The structure of payments should not be altered after it has been agreed by both the parties, so as to make sure that the payments remain tax-free. Lump sum payments are certainly taxable. Moreover, many individuals who come in to large sums of money are not able to invest wisely while in the case of structured payments, only small amounts are provided periodically which regulates a persons spending habit. It can be a boon for senior people, since it offers a steady and fixed income and they are not in much risk, as they only receive small cash checks instead of a large sum of money at hand, which can be dangerous at times. Thus, it offers security for retired people, to lead a comfortable life.
Structured settlements are generally funded by an annuity, which is provided by a life or other insurance companies. Structured settlements are much cheaper, when compared to court cases, thus making more and more claimants to opt for out of court settlement. Structured settlements eliminate lengthy court proceedings, which is costly and time consuming. Such Structured settlement annuity are very helpful in certain cases like, for those who are disabled either permanently or temporarily or for those who are undergoing medical treatment and for minors. An individual has no need to worry about long-term investments since regularly scheduled payment over a particular period of time provides one with security and peace of mind. And also, structured settlement annuities can be really flexible, like one can structure their annuity so as to pay their huge medical bills directly and balance can be paid out through various type of annuities like life annuity or period certain annuities. Straight life annuity is the simplest form of annuity, which guarantees payments for the lifetime of one person and Period certain is nothing but a fixed period of time specified by the annuity holder.
Selling Structured Settlement Payments
A Strutured settlement annuity recipient can receive reasonable amount of money they need today, instead of distant and future payments. Of course, it helps to have a regular source of monthly or yearly income, but when one is facing a major debt or expenses; such payouts very rarely provide instant relief to your financial problems. In such cases, structured settlement annuities are transferred to companies specializing in purchase of such annuities, for a large lump sum. This results in that settlement purchasing company to be the new owner of the annuity, which was previously with you, so they compensate with cash for the purchase. Individuals, who are in dire need of money, decide to sell their structured settlements either in part or wholly.
But, mostly people sell only a part of their settlement annuity, so as to meet their immediate requirements. There are numerous companies who are ready to buy structured settlements. They are drawn towards such settlement annuities due to the fact that such annuities promise a secured and steady cash flow and also the main attraction, is that the transaction is not taxable. Structured settlement purchasing companies, buy annuities at a discounted rate, so that the discount equals the existing bank rates, so as to cover the risk and as well as to make a profit. Such companies offer various flexible-purchasing plans that can be tailored to individuals requirements and cash for such structured settlements are obtained as full payment or shared payment. Full payment is where the individual sells all his balance future payments for a lump sum amount, to the purchasing company, at a discounted value. If an individual sells only a portion of his or her future payments, it is known as shared or partial payments, and they can still receive the remaining payments, when due. When people do not desire to wait for years to receive cash, opt for settlement purchasing companies, where they receive instant cash and are free to utilize it in any way they wish, like paying off debts or for education. Instead of some future time, one gets to use the money now when they decide to sell payments of structured settlement annuities. One should always sell only few payments and the time spent researching about the process, will only help you to obtain more cash payout in your sale of structured settlement annuities. Do always research well about some settlement annuity purchasing companies, check its past payment records and also their working relationships with the insurance companies and choose one with utmost care to get the best deal. Check well about the credentials of the prospective purchaser, they should be licensed and insured.
An Analysis of Structured Settlement Annuities
A Strutured settlement annuity means an obligation for payment, which is deferred and such annuity plans has its own pros and cons. An insurance company offers a Structured Settlement Annuity to the annuitant, so as to financially offset the damages, which was caused by their client. Once you agree for such structured settlement plans and sign on the dotted line, you cannot make any changes later as to the amount or regarding the schedule of annuity payments. That is, you cannot suddenly opt for large sum of money now, instead of small payments every now and then. Moreover, the annuity will not keep up with inflation, that is, when the cost of living increases, the monthly or annual payment is not going to change. It is the biggest negative factor for such settlement annuities. Structured settlement is a great tool to compensate the plaintiff, or the injured person with scheduled payments over a long period of time instead of one large payment. It is always advisable to go for an attorney advice before going in for a Strutured settlement annuity. In some states in the U.S, it is mandatory to avail the advice of an attorney in such cases. The most important benefit of opting for structured settlements is that it provides ready cash at regular intervals and moreover, the money you is receive is, free of both state and federal taxes. Since one will have some form of reliable income in the future, it makes us feel more secure and adds to the fact that most insurance companies, which make these payments are large establishments and are indeed, very reputable. So, this fact certainly takes the worry away out of ones financial future
Structured settlements are generally used to settle personal injury or other suits and each one is tailor made according to the individual cases. These are established for various different reasons, so as to take in to consideration, the possible future needs of the plaintiff and also to provide a steady and reliable source of income. It might be a car accident or even a bite from your neighbors dog or any other mishaps. It is a fact that the injured person often opts for compensation through structured settlement annuities and it provides for a stream of payouts over many years. Do you know that structured settlements are absolutely tax-free. The income received from such type of settlement annuities are not considered as taxable income and that makes it the most desirable feature.
Now, in case if you opt for lump sum payments, the interest accrued through investments, which is made from money received as lump sum, is subjected to state as well as federal taxes. Both the concerned parties, that is, the defendant and the plaintiff, prefer structured payments as they are settled without having the need to go to court. One has to anticipate the future financial needs, so as to find out how to structure your settlements, which will cover all the necessary expenses. Structured settlements come in the form of annuities that are sold by insurance companies and the payments are absolutely tax-free.
Understanding Structured Settlement Annuities
A Structured Settlement Annuity is basically an insurance policy, which provides for scheduled payments to a plaintiff in a lawsuit, purchased by the losing side. The person receiving the scheduled payments, as per the structured settlement is known as a payee or an annuitant. Usually, the structured settlement payment amount is broken down in to stream of scheduled payments, to be paid out over time. Such payments can range from monthly, yearly or to a variety of combinations, depending upon the agreement. A defendant purchases settlement annuity from an insurance company to settle a personal injury lawsuit and it is indeed an unfortunate type of payout. There are various products, so one has to be more careful and should get all the required information before making a choice. A settlement annuity is a particular type of annuity plan, as a result of a settlement over a personal injury lawsuit and can be structured to make payments for a certain number of years or for ones lifetime.
An individual has to consider the following factors when entering in to the settlement agreement, like the date when the payment begins, current age, and extent of risk in occupation, duration and retirement plans. The structure of payments should not be altered after it has been agreed by both the parties, so as to make sure that the payments remain tax-free. Lump sum payments are certainly taxable. Moreover, many individuals who come in to large sums of money are not able to invest wisely while in the case of structured payments, only small amounts are provided periodically which regulates a persons spending habit. It can be a boon for senior people, since it offers a steady and fixed income and they are not in much risk, as they only receive small cash checks instead of a large sum of money at hand, which can be dangerous at times. Thus, it offers security for retired people, to lead a comfortable life.
Structured settlements are generally funded by an annuity, which is provided by a life or other insurance companies. Structured settlements are much cheaper, when compared to court cases, thus making more and more claimants to opt for out of court settlement. Structured settlements eliminate lengthy court proceedings, which is costly and time consuming. Such Structured settlement annuity are very helpful in certain cases like, for those who are disabled either permanently or temporarily or for those who are undergoing medical treatment and for minors. An individual has no need to worry about long-term investments since regularly scheduled payment over a particular period of time provides one with security and peace of mind. And also, structured settlement annuities can be really flexible, like one can structure their annuity so as to pay their huge medical bills directly and balance can be paid out through various type of annuities like life annuity or period certain annuities. Straight life annuity is the simplest form of annuity, which guarantees payments for the lifetime of one person and Period certain is nothing but a fixed period of time specified by the annuity holder.
Selling Structured Settlement Payments
A Strutured settlement annuity recipient can receive reasonable amount of money they need today, instead of distant and future payments. Of course, it helps to have a regular source of monthly or yearly income, but when one is facing a major debt or expenses; such payouts very rarely provide instant relief to your financial problems. In such cases, structured settlement annuities are transferred to companies specializing in purchase of such annuities, for a large lump sum. This results in that settlement purchasing company to be the new owner of the annuity, which was previously with you, so they compensate with cash for the purchase. Individuals, who are in dire need of money, decide to sell their structured settlements either in part or wholly.
But, mostly people sell only a part of their settlement annuity, so as to meet their immediate requirements. There are numerous companies who are ready to buy structured settlements. They are drawn towards such settlement annuities due to the fact that such annuities promise a secured and steady cash flow and also the main attraction, is that the transaction is not taxable. Structured settlement purchasing companies, buy annuities at a discounted rate, so that the discount equals the existing bank rates, so as to cover the risk and as well as to make a profit. Such companies offer various flexible-purchasing plans that can be tailored to individuals requirements and cash for such structured settlements are obtained as full payment or shared payment. Full payment is where the individual sells all his balance future payments for a lump sum amount, to the purchasing company, at a discounted value. If an individual sells only a portion of his or her future payments, it is known as shared or partial payments, and they can still receive the remaining payments, when due. When people do not desire to wait for years to receive cash, opt for settlement purchasing companies, where they receive instant cash and are free to utilize it in any way they wish, like paying off debts or for education. Instead of some future time, one gets to use the money now when they decide to sell payments of structured settlement annuities. One should always sell only few payments and the time spent researching about the process, will only help you to obtain more cash payout in your sale of structured settlement annuities. Do always research well about some settlement annuity purchasing companies, check its past payment records and also their working relationships with the insurance companies and choose one with utmost care to get the best deal. Check well about the credentials of the prospective purchaser, they should be licensed and insured.
An Analysis of Structured Settlement Annuities
A Strutured settlement annuity means an obligation for payment, which is deferred and such annuity plans has its own pros and cons. An insurance company offers a Structured Settlement Annuity to the annuitant, so as to financially offset the damages, which was caused by their client. Once you agree for such structured settlement plans and sign on the dotted line, you cannot make any changes later as to the amount or regarding the schedule of annuity payments. That is, you cannot suddenly opt for large sum of money now, instead of small payments every now and then. Moreover, the annuity will not keep up with inflation, that is, when the cost of living increases, the monthly or annual payment is not going to change. It is the biggest negative factor for such settlement annuities. Structured settlement is a great tool to compensate the plaintiff, or the injured person with scheduled payments over a long period of time instead of one large payment. It is always advisable to go for an attorney advice before going in for a Strutured settlement annuity. In some states in the U.S, it is mandatory to avail the advice of an attorney in such cases. The most important benefit of opting for structured settlements is that it provides ready cash at regular intervals and moreover, the money you is receive is, free of both state and federal taxes. Since one will have some form of reliable income in the future, it makes us feel more secure and adds to the fact that most insurance companies, which make these payments are large establishments and are indeed, very reputable. So, this fact certainly takes the worry away out of ones financial future
