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Structured Settlement Choices

A person has choices available to them when granted a structured settlement. Depending on the resources of the person awarded the settlement, there are possible choices. Mortality, personal finances, and medical expenses are all valid consideration when deciding how to receive payment. It will be the responsibility of the awarded person how funds will be disbursed to them. A few options worth noting are life annuity, deferred lump sum, and joint and survivor annuity.

A deferred lump sum is when the settlement amount is to be awarded on a specific date. In this case the person receives all of their money in one lump sum payment. However, it is not instant on the date of the award it is set at a later time. This gives the party that is paying the settlement some time to pay the settlement in full. This is good for the person who is not in a rush for their money. The person can get the total settlement in a lump sum.

The life annuity is when the settlement is paid throughout the lifetime of the person. The settlement is divided in annual or monthly payments over the lifetime of the person. This can be tricky because you cannot know how long a person will live. Also what happens if the person outlives the settlement date, how is that handle? These are considerations at have to be discussed when opting for this payment method.

Joint and survivor annuity is done with mainly married couples. The payments are made continuously even if one spouse dies. However, the amount of the payment may be decreased. This works well when an unfortunate death occurs, the other spouse will not lose out on the remaining settlement amount. A financial hardship on the surviving spouse can occur, if the payments are stop completely. In some structured settlement situations this does occur. Once the primary person of the settlement dies, that ends the payments.

People who receive structured settlements are flooded with people offering advice on how to receive their settlement. One of the first things you need is a reputable attorney or financial advisor is you have a large settlement award. If the settlement is minimal, you will probably be able to make the decision for yourself. Take a look at your whole personal financial picture, and decide the best option. Other options available are period certain annuities, deferred defined benefits, U.S. Treasure bonds, etc. Consider all options before making a decision.

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