Basics Of Structured Settlement And Annuities | personal finance ...

Often it is a combination of structured settlement and annuities that are granted to a claimant by a personal injury court. These two are combined in order to ensure long term financial stability of the claimant. The claimants often insist on structured settlement and annuities to be combined into one even if they reach a deal outside the court. The major benefit of this arrangement is the long-term financial satisfaction. An insurance company takes over the responsibility of providing regular payments over a set period of time and claimants remain free of future financial condition of the defendants.

How it works?

A structured settlement and annuities package works in a simple manner. Once a judge grants the decision in claimant?s favor, he or she is approached by the defendants? lawyers. Negotiations ensue and a deal is reached once both parties agree to its contents. Under this deal, the defendants agree to pay the compensation and the plaintiffs concede to an annuity plan. An insurance company is brought into the deal where the defendants pay for the annuity plan in name of the claimant. The duration of this plan could be anywhere from a year to life time of the claimant. The insurance company thus becomes responsible for offering regular payments to claimants after every month, quarter, six months, or a year.

Things to look for

If you are signing an agreement for structured settlement and annuities then it is necessary to look at its core features. The first thing to observe is the total amount on offer. It is possible that the defendants offer less money than what was ordained under the court ruling. You can take them to court in case of any major violations of the agreement. It is also possible to meet with your lawyer and set a new payment plan. Whether you are receiving lump sum payment or annuity plans, it is important that the total worth of compensation remains the same.

The nature of injuries will determine the duration of the plan with people suffering from debilitating illnesses will most likely receive a life-long insurance cover. Discount and premium rates, additional charges, processing fees, and other overheads are often taken from the claimant?s account. You will need to pay some of these charges but it is important to look for any extra expenses being added to your payment receipts. You should not pay anything unless you have ensured that it has no strings attached.

Sales

It is possible to sell structured settlement and annuities before their maturity. This can be done by contacting an investor or insurance company that is eager to buy these plans and offers the best rates. You will not receive 100% value of the settlement plan in the sale but it is possible to receive as much as 95%. This calls for tough negotiations with the buyers where you convince them to forgo some of the charges. You will receive a lump sum payment after the sale that you can use for other expenditures or medical treatment.

About the Author

Darren is a financial planner who specializes in assisting individuals and families with their current financial goals and retirement planning. Specializing in annuities but also REIT?s, Darren is also familiar with life insurance planning. He enjoys writing articles on various aspects of financial planning and what you can do to protect your net worth. You can check out his latest articles on Sell Structured Insurance Settlement tips and how to negotiate a Structured Settlement Annuity so you will know how to benefit the most for long term financial security.

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