Don’t let structured settlement annuity become your nightmare!

Structured Settlement Annuity – start here if you want to understand

What is Annuity?

The term annuity confuses a lot of people. Here, I will demystify it and lay out different ways you may get your settlement from insurance companies.

Annuity simply means a situation whereby a seller usually the insurer makes payments to the buyer usually the insured for the term of their life.

The annuitants (payments to the buyer) are for immediate payment of a single payment annuity (lump sum cash) or regular payment annuities which come in a series of regular payments to the issuer. What this means is that you may get your annuitant cash or in series of payment over a long period of time.

There are different life annuities but a good example of life annuities is when a person receives a large settlement from a lawsuit. A company may buy the lump sum and then make payments to the recipient of the settlement for the term of their life.

To annuitize means you as the annuitant is ready to be removing or receiving funds from the annuity.

The more payment made by the contract owner into the annuity, the longer the payments will continue.

A lot of people do decide to pay in to annuity long before annuitizing in order to receive lifetime payments.

Some do it for themselves while others purchase and make a family member as the annuitant.

You really need to decide on who you are as a person – what kind of risk-taker are you?

Different Types of Annuities

• The single payment annuity is when the insurer buys a lump sum.

• A regular payment annuity; when a company buys the annuity in exchange for series of payment over a period of time.

• Fixed annuities make payments in a set amount or that will increase over time by a certain pre-determined percentage.

• Guaranteed annuities or pure life annuities; annuities paid to a recipient that may die before their original payment is recovered, but the payments will continue to a beneficiary or designate.

• A joint annuity; annuity payment here is structured so that the payments will continue to the surviving spouse, though payments will stop if the surviving spouse passes away.

• Impaired life annuities; annuities offered to people that have a severe illness that will cut short their life expectancy.

What is a Structured Settlement?

This is a type of payment where a structured payment made to the annuitant in series of installments over a period of time which is different than getting a cash award or a lump sum. For example, if two parties got involved in an accident and it was ruled that party A was at fault, then party A may have to pay party B damages. If the amount was two million dollars, instead of a check being cut for two million dollars, it would be paid out in monthly installments over a period of a few years. For instance, a two million dollar settlement paid out monthly over ten years would mean a check paid to party B in an amount a little over sixteen thousand dollars per month.

Some structured settlements are paid out monthly while others annually depending on the type of plan that is good for you.

Benefits of Structured Payment

For the party that receives the structured payment, it may help alleviate some stress, offset hospital bills and some other little bills monthly in as much as it is used wisely. This is easier said than done. For the party not to squander the money, a financial advisor or investment advisor maybe hired.

Some victims will prefer a cash award payment; this is not to say there aren’t specific cases where a structured settlement is ideal for the victim especially in a situation where the party needs is in need of long term or permanent care.

Structured Settlement Companies

If the victim needs a large amount to pay for hospitalization and soaring medical bills, the only option you have is to sell your structured settlement and receive the amount that you need now. Finding a trusted structured settlement company to purchase your settlement is not hard but you have to do your due diligence..

Structured settlement companies exist for this purpose, to buy or sell structured settlements to give victims a options for their annuity and to provide those claimants who are in need with a lump sum instantly.