How Does A Structured Settlement Annuity Work

If you've watched television or paged through your local newspaper or magazines, somewhere you might have heard of the phrase structured settlement , of course, in most cases, most of us will not know exactly what this phrase is.
When a party has been injured and has a bodily injury claim, an insurance company will make periodic payments to the injured party as part of their claim. So, instead of being paid out a lump sum of amount for the entire claim, this claim will be paid out annually or monthly depending on the arrangement with the insurance company. A structured settlements work out very well for both the insurance company and the person who is actually claiming the amount from the insurance company.
Simply, a structured settlement is simply a financial package that allows the settlement to be paid out over a certain amount of time. The wonderful thing about a structured settlement is that if this amount is paid over a life-time, generally, you will receive more then you would initially have gotten if you had received the lump sum. Each structured settlement is specifically made according to each person's individual situation. According to the insurance amount, the premiums that you have been paying and the standard of the injury, your structured settlement will generally be based on these constants.
Now, if you are currently in the process of getting or being awarded a structured settlement , there are a few benefits that you should keep in mind that might be worth going through the trouble of getting one.
A structured settlement annuity proves a constant supply of money over an extended period of money, regardless of the economic situation. You can always have the safety net of the annuity which provides you with a sense of security. Extending to this, your structured settlement is tax-free over a specific period of time. Due to the reliability of structured settlements , it is possibly a greater investment then most stocks, bonds and even in these hard times, real estate.
The most important to think of a structured settlement is that it is flexible and can be created in such a way that it can be paid over as many years as you would like security. A structured settlement can also be paid over your entire life-time. In most cases, there is also a clause in the insurance company that states when the beneficiary of the structured settlement has passed away, their spouse or specified relative will get a lump sum payment from the structured settlement as well.
What sort of protection do you get when you receive or buy a structured settlement ? They are both protected through the regulation of the Federal and State statutes. In the long run, if you want a safe investment, then it is practical to choose a structured settlement annuity . The tax benefits and the security in having a constant amount being paid into your annual budget is a big positive if you have some extra money to spare. About the Author
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