Types of Settlements
Settlement are two types.
Structured settlements
Lump
sum
settlements
Structured settlements also called periodic
payment is a legal settlement of the assured amount by insurance companies. The
payment may be monthly, yearly or on specified intervals.
Lump sum payment is a onetime payment
of the assured amount to the plaintiff.
These settlements are awarded against a
personal injury.
When there is a legal disagreement, settlements resolve
the issues without the a trial. Civil law allows the resolution of
a contract dispute, personal injury claim or liability issue. The settlement
firms also pay for any damages a person suffers because of a dereliction
of duty.
Like it is common in any field settlement may
cause more troubles than they solve and therefore it's important to
know which types of settlements you may be entitled to and what you should do
after receiving them.
Settlements may be reached even before a lawsuit is filed. This makes them
valuable negotiation tools between potential legal adversaries; at the same
time, they save the money that consumers would have to spend in attorney fees
for a complete trial.
Lump Sum/Life Contingent Lump Sum Annuity
It is possible to set up an annuity with a lump sum payment for a future
date. (Lump Sum) You can set it up to receive the sum, for example, ten years
into the future. Should you not survive, your beneficiary would receive the lump
sum on that future date. Alternatively, the annuity can pay a lump sum with the
provision that you are alive on the due date. Then there is no payment to any
beneficiary. This is called a Life Contingent Lump Sum.
Life Annuity-Period Certain Annuity
These payments are for a guaranteed number of years or for life,
whichever is up first. The number of years is based on your life expectancy.
This works to your beneficiary who will be paid for the remaining
guaranteed number of years should you pass away prior to the designated number
of years.
Temporary Life Annuity
A Temporary Life annuity pays you periodically for a designated number of years
if you are still living. In this type your beneficiary will not receive
funds after you are gone. In other words, your annuity ends when you die should
you pass away before the selected number of years
Life Only/Joint Survivor Annuity
There are also Life Only annuities that pay monthly payments for life with no
beneficiary provision. A Joint & Survivor annuity will pay you monthly payments
for life, and, if your beneficiary survives you, he or she will be paid monthly
payments for the balance of his or her life when you are gone.
Most of these annuities can be designed to suit your needs in terms of how often
the payments are made, whether or not you get an up-front lump sum before the
periodic payments begin, whether or not your attorney is paid in periodic
payments or in a lump sum, etc. Make sure you ask lots of questions and get all
of the information from your attorney prior to agreeing to accept a particular
structure. If you would like an experienced injury lawyer to review your case,
fill out our case evaluation form and an attorney will contact you for a
no-cost, no obligation evaluation.
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