STRUCTURED SETTLEMENT VS ANNUITY

Structured settlements are used when a personal injury or any serious injury occurs. In structured settlements we give the amount annually that is used over a period of time. Annuity is something similar to structured settlements but not exactly. The terms “Annuity” and “Structured settlements” may have similar equalities. But, that one word that makes them equal is “Payment made annually”.

An annuity means payments that are made by insurance companies or investment firms that will repay the person during his/her retirement period with guaranteed investment if any loss in principal occurs. Structured settlements are usually being paid for lottery winners, tobacco lawsuits, lawyers and law firms other than only personal injuries. While, annuities are paid for guaranteed principal, timed out and are also offered by insurance companies. One main reason to have annuity is that, the security that it provides. As in, security it does not only secures the principal rate of return but, the earnings that we produce as well. Structured settlements are given as a period of time or for a life time till death. This payment is depending upon the settlement agreement. Structured settlements are governed by federal and state laws which by the end must be shut only if the court order is passed. An annuity has a characteristic of both insurance policy and an investor. Annuity is usually an agreement between a consumer and an insurance policy. Structured settlement provides a plus point on both sides in an injury case. For a structured settlement holder, he/she needs to provide the amount rate so that, the defendant would quote the victim for the amount calculated. Annuity on the other hand, is predictable. As in, we have lots of options here like fixed, immediate, longevity and more.

In the case of a minor victim in structured settlements, the victim’s future is kind of settled. To be put in an ordered manner, he/she will be paid for future and has the benefit to pay their college or school fees or check on their monthly expense or whatsoever. To be clear, it is not that annuities are helpful or structured settlements provide something better, it is just as how comfortable you are to either of them. It is only you who should decide as to which will gain you profit and not put you in trouble. How you use them is what matters the most. These two terms finally end up paying money to a person. One last similar difference between the two is that, they pay us amount that satisfies our needs and also settles our futures liabilities, if not all but a portion of what is to be paid.