Upon reading this article, it is assumed that one is already aware of the general definition and usage of structured settlement payments. However, whether one is the claimant to such a series of monetary installments or merely curious about the particulars of this form of payment, it should never be said that structured settlements are a simple arrangement, only available in one basic configuration. There are myriads of ways in which structured settlements may be used, and in return many different types of structured settlements, each developed to meet a different set of needs.

For starters we have the life annuity, in which payments are administered to a payee or plaintiff regularly for the express purpose of maintaining their standard of living indefinitely, or for a select period. The latter type of life annuity is denoted by ‘X years certain’, when payments will continue for X number of years whether or not the original recipient lives that long. So a life annuity that is 60 years certain will continue for exactly 60 years, even should the recipient be six feet underground come the final date of payment.

Then there are deferred lump sum payments, a type of structured settlement that doesn’t revolve around periodic payments. These are held against a certain date for a specific predetermined purpose, such as one’s maturity or one’s college education, and are given on that date in a single installment. They may be either guaranteed, which is most common, or life contingent, which means that the original recipient must be alive come the time of payment. Otherwise, the payment is not honored and the recipient’s family sees none of their expected money.

If one wants the amount of money they receive to increase at a fixed rate to combat inflation, step annuities are the way to go. A step annuity increases the scope of its payments at a set rate over a given period or lifetime, as part of an effort to ensure that the ‘real’ value of one’s payments remains unchanged. However, if inflation unexpectedly drops, for example, the lucky recipient of a step annuity will have an objectively larger set of payments.

Percentage annuities are essentially chosen for the same reason as step annuities; in fact, one might even argue that percentage annuities are step annuities, with their amount of increase always reducible to a single, exact percentage. So, a 6% percentage annuity will have its payments periodically increase by 6%, while a broader ‘step’ annuity might use currency amounts instead.

If the recipient of a structured settlement isn’t currently in need of the money it contains but is anticipating a future desire for its presence, they may take out a deferred defined benefit annuity. In this situation, one may specify a later date to begin their structured settlement payments, with a specific amount already in mind. If you really want to have money in fifty years but only have a structured settlement plan that covers thirty, try deferring it for twenty years if you don’t presently have need of the capital.

Period certain annuities are ideal for one who wants the dependability of periodic payments in the short term, and a single, large payment somewhere down the road. A period certain annuity starts out as period payments until a specified date, when the remainder of one’s capital is doled out all at once. For one torn between these two very different means of payment, a period certain annuity contains the best of both worlds.

When two or more people want to take out an annuity together, they may receive a joint or survivor annuity in which there are multiple payees or plaintiffs. In the latter case, payments continue at either the same rate or a previously determined percentage of it; if you have been injured alongside someone else, or if you and your friend (or friends) want to provide each other with ‘life insurance’, a joint or survivor annuity may best fit your needs.

If you are the gambling sort or have extreme confidence in the portfolio that comprises the capital you are to be receiving, a variable income payout annuity may be right for you. In this payment scheme, one’s structured settlement payments will fluctuate depending on just how well the package’s constituent stocks do, in cases wherein the sum comes from the stock market in the first place, of

If you are reading this article today, there is one thing we can say about you with certainty: you want to learn more about structured settlements. Perhaps this is because you are the recipient of just such a payment scheme, or you might simply be researching the subject out of curiosity. In either case, one question must be answered: what exactly is a structured settlement?

Typically doled out in response to a tort – personal injury – claim, a structured settlement is a series of relatively small, periodic payments meant as a steadier alternative to the lump sum for one who doesn’t want all of their eggs in one basket, so to speak. However, this is not meant to imply that structured settlements are only given to injured unfortunates, as lottery winners who choose to gradate their winnings into a series of weekly or monthly payments, for example, are also owners of structured settlement agreements. When the dichotomy between structured settlements won in court and those obtained elsewhere comes into play, a difference in terms results: the recipient of a structured settlement is referred to as the plaintiff in situations involving a court case, and a payee otherwise.

Aside from these two cardinal examples, other sources of payments which may be broken into structured settlement form exist. One oft-cited method of obtaining such malleable capital is liquidating a piece of real estate; the money one receives through selling their home – or merely a home, if they have others – is often divided into regular installments for the sake of dependability. As many of you probably realize, there are a great many benefits that come with less money being available all at one time, namely the lessened temptation to squander it all.

How many times has this happened to you, or someone you know: it’s payday, and you just received a check or envelope filled with cash. Before using it responsibly, an impulse buy rears its ugly head and one is left with a fancy suit or a gaudy statue, as opposed to being able to eat well for the next week or so. Imagine the damage such behavior could cause if applied to a massive payment like a pile of lottery winnings: if a single paycheck could cause great personal inconvenience when misused, what would happen to one whose anticipated fortune is suddenly absent?

It wouldn’t be pretty, that’s for sure. Luxury is hardly worth concerns like these – to ensure that the money is used for its intended purpose, a structured settlement would be ideal. And remember that many who own a structured settlement first obtain it through legally proven need: if your livelihood depends on this money, a structured settlement agreement would be the way to go.

Mind you, one’s business with structured settlement payments need not be limited to the benefits that come with owning some; there is a payment plan for any situation, including many where such periodic payments are not an ideal solution. For example, what if you’re in debt and want to use money garnered from your structured settlement payments to erase your obligations immediately? It may take a long time to accrue the requisite funds from a structured settlement plan; however, many fine companies exist that would buy your plan at a reasonable rate.

On a different note, what if you need to make a big-ticket purchase immediately? For whatever reason, you might need to purchase a car or fund a pricy medical procedure with no time to spare. Here, a structured settlement would not offer the timely assistance required.

Structured settlements are not ‘better’ or ‘worse’ than other formats of payment; they, like any other payment plan, meet the need of a specific demographic of people. If you are currently in the process of receiving some money and have the opportunity to decide upon how it will be distributed to you, then give structured settlements the consideration they rightfully deserve. They are equally capable of making a good situation better and compensating for harm wrongfully done to one’s physical or mental health.