Annuity For Legal Structured Settlements

Annuity structured settlements are given to people who win a court ordered payment, as in an injury suit, or a class action suit. An annuity for legal structured settlements provides the receiver with a certain amount of money each year/month for a set number of years or for a lifetime. This type of arrangement is often used when the money is of a larger sum than a company, person or organization can provide in one lump sum. Lottery winners are also issued this type of payment arrangement. Before agreeing to any terms, a receiver should be informed of the legal ramifications because they can get quite complicated. Many attorneys will rely on experts who routinely handle this type of payment. Typically, the expert is a broker that is familiar with working with many different companies that provide structures. The broker will gather information about the receiver, their medical history and bills (if applicable), lost wages, ability to return to work, expenses, and other information pertaining to the specific case filed.

The broker, while working closely with the attorney, will come up with tailored annuity structured settlements that best suit the needs of the receiver. The obligation to make the payments is then set up through a through a third party. The structure can be set up to benefit the receiver within a certain situation, and can change throughout the life of the settlement. The annuity for legal structured settlements can be made for higher payments in the beginning, while a person is out of work, for example, then the payments can decrease as the receiver is able to return to their place of employment. The payments can also be set up to pay certain bills off first, before monetary funds are released to the receiver for free use. An example of this would certainly be valid in a personal injury suit, where the majority of the funds would be sent in to pay for overdue and unpaid hospital bills. Next would be loss of wages, then payments for pain and suffering would be released.

Some questions to ask during the process of distribution for annuity for legal structured settlements are: Have there been other clients that the broker arranged payments for? What are the advantages and disadvantages of the different types of payment arrangements? Is a stretching out the payments better than a lump sum payment? Once these questions have been satisfactorily answered, the receiver can feel confident that their annuity structured settlements are in the hands of experienced professionals who are looking out for their best interests. An example of how one arrangement might work follows: A man is 25 years old, when an accident occurs. He cannot work and will need $2000 per month with an annual 3% increase for cost of living, and the ongoing payment of his medical expenses which will cost $1500 per month for 5 years. The man would also like to receive an additional $500 per month for the remainder of his life. There are currently $36,000 in medical bills, and $275,000 in lawyer fees. He would also like an immediate cash distribution of $31,000 in one lump sum.

For future needs of the man from ages 25-45 with regards to salary, the guarantee payout should be $644k. This includes the monthly salary with the annual 35 increase. Then for the rest of his life, depending on how long he lives, will cost the insurance company a total of up to $2.3 million dollars. The ongoing monthly medical expenses will cost the insurance company about $90k, plus the additional $500 monthly payment for life will cost about $390k. The current obligations will be the $36k in medical bills, the $275k in fees for lawyers, and the $31k in immediate cash distribution. Annuity structured settlements that are set up this way will cost the insurance company $3.6 million in cash, and another $1.1 million in fees, interest, and costs associated with the payout. An annuity for legal structured settlements claim can really cost the payer a tremendous amount of money just i additional charges, but it may be the only way a company can pay if they do not have the $3.6 million in cash to pay in one lump sum.

Most minor injury cases bypass annuity structured settlements and pay out in one lump sum. More serious injuries, especially those that render a person disabled for life typically require an annuity for legal structured settlements in order to be sure the victim in the situation is properly taken care of, since through no fault of their own, they are rendered incapable of working to support their own families. Structured settlements are becoming more and more popular because they are in the form of an annuity, which is sold by a third party, usually an insurance company. At times, they may be invested in U.S. Treasury securities, and it grows the money needed, instead of the company paying all of the money and is completely tax free at the state and federal levels. Receivers should research all of their options before accepting any terms on payment distribution. "When thou vowest a vow unto God, defer not to pay it; for he hath no pleasure in fools: pay that which thou has vowed." (Ecclesiastes 5:4-5)

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