STRUCTURED ANNUITY SETTLEMENT : Pros and Cons

Many civil cases, particularly accident and personal injury lawsuits, never make it to trial because the parties reach a settlement agreement earlier in the litigation process. Generally, a settlement requires the plaintiff (person brining the lawsuit) to discontinue any further legal action in exchange for receiving a money payment from the defendant or the defendant’s insurance company. Structured annuity settlement payments are usually lump-sum (all at once) or structured (regular payments over a period of time).

A structured annuity settlement is an arrangement that provides the plaintiff with regular payments over the course of several years or for the rest of the plaintiff's life. They are especially helpful when the plaintiff suffers a serious and permanent injury known as a catastrophic injury. With a structured settlement, a defendant's insurer typically funds an annuity policy for the plaintiff. An annuity produces a continuous stream of income over the term of the structured settlement. Annuity contracts can be quite complex to cover a variety of expected expenses. (Structured annuity settlement)

Before accepting any settlement structured annuity agreement you should always discuss all available options with a tax attorney, personal injury attorney or certified public accountant (CPA) to fully explore tax consequences of a verdict or settlement. Below are some pros and cons of structured settlements for you to consider. (Structured annuity settlement)

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