You can expect to receive a structured settlement annuity when you find yourself in a legal battle against a big company, whether for a personal injury claim or some other form of compensation.
Such awards are the most common type of payout in this day and age, as these financial arrangements are often preferable to receiving a one-off lump sum for many people.
One of the biggest reasons that structured settlement annuities came about is because it makes it much easier for a company or an individual that was sued to pay up what they owe – especially in cases where a high payout is awarded to the claimant.
For many businesses, paying up the full amount could cause extreme damage to their financial stability.
This type of arrangement can also be beneficial for the plaintiff as well. A structured settlement annuity is the perfect solution for those who aren’t good at managing their finances, or for those who might be intimidated by receiving such a large amount of cash in one go.
The structured settlement annuity first came about in the 1970’s.
Basically, the amount of compensation or other payout you have been awarded is paid in installments, with the plaintiff receiving an agreed amount of cash on an annual basis, as opposed to them getting all the money in one go.
They have proven to be very successful, as it’s usually possible to agree on a deal that suits both parties in any compensation claim.
However, this doesn’t mean you can’t sell your annuity in the future if you have a pressing need, so don’t consider yourself beholden to the terms of the deal.
The idea of selling structured settlements is completely lawful in common law countries such as the USA, England, Canada and Australia.
While each nation will have slightly different process and definitions of the law to be considered, it’s all above board.
Provided you have a good reason, most courts will allow you to sell your future payments to a certified structured settlement buyer.
Structured settlement annuity process
The awarding of a personal injury structured settlement usually takes place following a workplace injury or some other accident where another party is deemed to be responsible, and where the claimant’s injuries impact upon their quality of life or cause them to be unable to work.
Structured settlements are usually the result of an agreement between the two parties involved, although sometimes they can be brokered or ordered by a court.
The exact amount of your structured settlement quote will depend upon various factors, including the extent of your injuries and how much the defendant can realistically afford.
Once both parties have agreed on the terms, the structured settlement annuity will be made legally binding by a judge in court.
The claimant must agree to drop any charges against the defendant, and then they will be entitled to receive the pre-agreed payments that will be paid out according to the agreed payment schedule.
You gain financial security to compensate for your injuries, while the defendant is given a reasonable opportunity to meet their obligations.