Types of Structured Settlements

If you have been involved in a situation at the hands of a company or another person that resulted from negligence or intention misconduct whereby you were permanently harmed, you need to seek advice from a qualified attorney.  As a part of the recovery process in making that company or person responsible for actions that caused you injury, a lawsuit would be filed.  From there, if you win the lawsuit for the original amount, were awarded more money than you sought from a jury, or ultimately agreed to a settlement amount to close the case, you could consider the different types of

If you have been involved in a situation at the hands of a company or another person that resulted from negligence or intention misconduct whereby you were permanently harmed, you need to seek advice from a qualified attorney.  As a part of the recovery process in making that company or person responsible for actions that caused you injury, a lawsuit would be filed.  From there, if you win the lawsuit for the original amount, were awarded more money than you sought from a jury, or ultimately agreed to a settlement amount to close the case, you could consider the different types of structured settlements.

The money awarded by the court or the money agreed to accept outside of court would be paid either in one lump sum or if preferred, in the form of a structured settlement.  In the case of a settlement, you would receive a payout amount each month.  The actual amount and schedule would depend on a number of factors but the benefits typically outweigh accepting all the money at once.  For one thing, receiving monthly payments makes money management easier but this also eliminates risk of spending the entire settlement and then having nothing on which to pay bills or live.
As mentioned, there are different types of structures settlements so if you find yourself in a situation such as this, the following descriptions would certainly be beneficial.

Life Annuity

One of the types of structured settlements is more commonly known as “Life Annuity” although sometimes referred to as “Life with Period Certain”.  Either way, this means you would receive periodic payments but for a guaranteed number of years or for your entire life, whichever comes first.

As an example, if you were 50 years of age at the time of injury and as a part of the structured settlement the court ordered you to receive payments for 50 years, that means if you lived to be 100 you would receive scheduled payments.  However, if you were to become deceased at age 80, the beneficiary you named would become the recipient of the payments for the remaining 20 years.

Temporary Life Annuity

For types of structured settlements there is also the temporary life annuity option.  In this case, you would still receive periodic payments for a guaranteed number of years but only if alive.  In other words, with this type of structured settlement you would not have the ability to name a beneficiary.  Therefore, once passing on, the payments would simply stop regardless of the number of guaranteed years established.

Lump Sum Annuity

Although a lump sum settlement is what most people refer to, some call this type of structured settlement a “Life Contingent Lump Sum Annuity.”  If wanted, you could establish an annuity whereby you would receive a lump sum of money on a designated date in the future.  Let us you were 55 years old at the time of the incident.  To bolster your retirement funds, the lump sum could be set for ten years ahead, meaning at age 65 you would have more money on which you could retire.  Even if the injury left you unable to work, knowing you have a large amount of money coming at age 65 would provide peace of mind.

As with some of the other types of structured settlements, for the lump sum option a beneficiary could be chosen.  However, once you choose the future date, it could not be changed.  If you had established the lump sum payout for February 1, 2021, your beneficiary would get the money but not until that date.  Now, you could choose a provision whereby the lump sum payout for February 1, 2021 would only be made if you were still living.  Obviously, the beneficiary would not receive anything for this option.

Life Only Annuity

This is yet another of the different types of structured settlements to consider.  With this option, you would be able to determine the way in which payments are made according to need.  As an example, you could decide on the frequency of payments, if the attorney would be paid in periodic payments or a lump sum, whether you receive any upfront cash in the form of a lump sum prior to the periodic payments being set up, and more.  For some people, having control over payments of a structured settlement is very important but only you could decide this for yourself.  Additionally, payments would be paid for the remainder of your life and no beneficiary provision is offered.

Joint and Survivor Annuity

With this annuity, you would still be receive monthly payments for the rest of your life but if you chose a beneficiary and that individual were to outlive you the monthly payments would be transferred, meaning he or she would receive payments for life.  Of course, for the beneficiary to receive any of the money from your structured settlement in this case, you would be deceased.