Also identified as a periodic payment judgment or structured settlement, structured annuity settlement is an annuity or annuity groups wherein a particular insurance company issues cash installments as a payment to a qualified person who got an injured or met an accident. In this situation, cash payments are given as an installment or for every period. The plaintiff will receive this money given that he/she is alive. Installment of the money can be paid in many ways such as flat-rate amount, cash settlements or lump sums.

What about the underlying mechanism which drives it?

Usually, structured annuity settlement is a long term contract. With that, it is very crucial that the people involved, particularly those who will receive the money must understand various components like policies, amount for every payments, settlements, payment schedule and many others. Also, it is important possessing relevant documents such as agreement and copy of annuity application. Bear in mind that legal problems and regulatory with settlement broker can possibly difficult to assess.
With the approval of court, attorneys frequently use structured annuity settlement to compensate plaintiffs who are involved in personal lawsuit injury.

Why Do You Receive Structured Annuity Settlement?

The federal government sanctioned PPSA in order to protect the claimants from spending big amount of money they obtained from legal settlements. Wrongful death cases, compensation claims of workers and personal injury are considered as the most common settlement types.

• Wrongful death. Structured annuity settlement compensates the family of someone whose death is the subject of a wrongful death. The families are authorized to receive stream payments of tax free that accounts for the income loss previously grossed by the deceased.
• Compensation of a worker. A worker will receive structured annuity settlement who got injured on his job while recovering from the injury. The payments can be used to handle medical treatment and salary replacement during the time when an injured employee is unable to work, and other costs.
• Personal injury. A plaintiff settles large amount of money as a claim. The amount is structured in annual or monthly payments over the time. That payment is a great help for the recipient to pay for their medical expenses and other costs.

What are the advantages of structured annuity settlement that a person can get?

In every kind of cases, structured annuity settlement is perfectly suited. But when the terms are already in place, no one has the ability to change it. For that reason, some beneficiaries choose to sell their structured annuity settlement.

• In case of the premature death of a recipient, the designated beneficiaries of the contract continue to receive any guaranteed future tax-free payments.
• The payments can be planned for almost any period of time and can be deferred or begin immediately for many years as bidden. They may include benefit increases or future lump-sum payouts.
• The earned capital gains or interest accrual on the cash is discharged from state, local and federal income taxes that provide greater savings.
• Unlike mutual funds, bonds and stocks, structured annuity settlement is not dependent on the financial market’s fluctuations. An insurance company that allotted the annuity guarantees the payments.

For the Defendant

Not only will the recipients gain benefits when using structured annuity settlement, but the defendants as well. Such advantages are:

• Avoid jury trials
• Lead to quicker settlements
• Can reduce costs
• Can allow deduction of tax (self-insured)

As a general, people who obtained structured annuity settlement can have peace of mind knowing that they will receive financial support from it, whether it is a sudden health problem, an accident or other unpredictable conditions.
There are two types of structured annuity settlement – Qualified and Unqualified

Qualified

Traditional structured annuity claims for sickness or physical injury should meet certain requirements, which cover:

1. The amount of settlement has to be placed in annuity
2. Periodic payments are determinable and fixed, as to the time and amount of payment
3. Beneficiaries cannot change the periodic payments
4. The payments should be owed to the liability insurer or recipient, and others

Unqualified

This is the occurring type of structured annuity settlement when the claim for damages falls outside the common scope of wrongful death, sickness or physical injury. Oftentimes, they are used for claims that involve sexual harassment, racial discrimination and wrongful termination, among others. The tax benefits vary among the transaction types.

Starting a Structured Annuity Settlement

It’s very important to keep in mind that the plaintiff can’t start a structured annuity. It should be requested that you order to pay the awarded damages, either by court order or mutual agreement. Due to the myriad laws and regulations that surrounds structured annuities, you should maintain the attorney’s counsel during the process of distribution and funding.
Structured annuity settlement is very flexible. The annuitant can be able to request payment distribution as often as weekly. Also, he can also request that payments are made in differing levels of future financial needs like college expenses or medical equipment replacement.

Selling Your Annuity

Selling a structured annuity payments can be your solution to a variety of financial problems. Whether you will pay off student loans or debt, start up a small business or buy a house, using the part of your future payments will help you to get back on top of things. When you are facing a serious need, accessing your structured annuity is better than putting your life at risk. You can sell your payments, get money and get the children through college or improve your house.
Other reasons for selling structured payments include:

• Repairing or purchasing a house
• Investing or starting a business
• Funding a college education
• Divorce
• Compensating debt such as student loan, medical or credit card
• Clear up long-term investment
• Investing in a stocks, retirement fund or property

There are many selling options that you can make, its either partial, entirety or lump sum. In partial, you will only sell part of your payments but you’ll continue obtaining periodic income without losing your tax benefits. When you choose entirety, you will empty out all of your investment at once, ending chances of future periodic income payments. Selling lumps give you money in large increments, but will still guarantee a steady income flow from your structured annuity settlement.