Structured settlement is a tool that is utilized in order to resolve personal, physical injury claims. Structured settlement annuity is basically a financial or insurance arrangement in which a claimant agrees to resolve a personal injury tort claim by receiving annuity payment rather than the entire amount of money all at once. This ensures a regular tax-free flow of money over a period of time and they are specifically designed in such a way that they meet the injured person’s needs. Specialized consultants look over the process of settlements and help in the designing and negotiating as well.
Structured settlements were first used in Canada after a negotiation and settlement for children affected by Thalidomide. People started preferring this method since they could avoid having to attend a trial. The tool became popular in the United States in the 1970s as a more effective alternative to lump sum settlements.
Structured settlement annuities are unique in the sense that the recipient does not own the annuity. It is the defendant’s insurance company that does so. In case the insurance company goes bankrupt, the future payments that are supposed to be received by the payee are determined by the type of annuity that has been purchased.
A structured settlement annuity (SSA) has many benefits. Both the injured party as well as the defendant can reap the benefits of such a settlement. In case of the injured party, the payments are specifically designed in a way to meet their needs over a certain period of time. It emphasizes stability because the payments are designed to meet the recipient’s current as well as future needs. It also comes with the security of depending on a highly rated financial institution. As for the defendant, it leads to faster settlements and reduced costs. A jury trial can be avoided as well.
Structured settlement annuities are tax-free and are encouraged by the Federal Government and such settlements are typically approved by the court. These annuities can also be bought for plaintiffs under the age of 18 so that the money is kept safe until they are old enough to manage it.
Structured settlements were first used in Canada after a negotiation and settlement for children affected by Thalidomide. People started preferring this method since they could avoid having to attend a trial. The tool became popular in the United States in the 1970s as a more effective alternative to lump sum settlements.
Structured settlement annuities are unique in the sense that the recipient does not own the annuity. It is the defendant’s insurance company that does so. In case the insurance company goes bankrupt, the future payments that are supposed to be received by the payee are determined by the type of annuity that has been purchased.
A structured settlement annuity (SSA) has many benefits. Both the injured party as well as the defendant can reap the benefits of such a settlement. In case of the injured party, the payments are specifically designed in a way to meet their needs over a certain period of time. It emphasizes stability because the payments are designed to meet the recipient’s current as well as future needs. It also comes with the security of depending on a highly rated financial institution. As for the defendant, it leads to faster settlements and reduced costs. A jury trial can be avoided as well.
Structured settlement annuities are tax-free and are encouraged by the Federal Government and such settlements are typically approved by the court. These annuities can also be bought for plaintiffs under the age of 18 so that the money is kept safe until they are old enough to manage it.