Saturday, September 22, 2007

The Buyout Of A Structured Settlement

Filed under: Structured Settlements — Structured Settlement Expert @ 8:06 am

For those who are involved in a personal injury suit, there are several reasons why a claimant may prefer to settle a lawsuit and accept a structured settlement. A structured settlement provides periodic payments over time to the claimant while formally dismissing the case against the defendant. Structured settlements are often designed to allow for ongoing financial support for the injured party.

However, such payments do not come directly from the defendant. Instead, the defendant must contract with an independent third party that has experience in structured settlements. Most often, a life insurance company acts in this capacity, providing an annuity that will fund the life of the structured settlement. The claimant is then to be issued payments – monthly, quarterly, or even annually depending on what has been arranged – that are funded by the annuity.

But, in some cases, it becomes obvious to the claimant that the structured settlement does not meet their current financial needs. Perhaps they are finding that they are coming up short to pay medical bills. Or a financial situation has presented itself for which a lump sum of cash is needed. In these cases, the claimant may wish to sell some or all of their structured settlement.

In a structured settlement buyout, a third party buys all or part of your annuity from you, giving you an amount for the annuity upfront. Many who receive structured settlements find that the terms of a buyout are much more conducive to their financial situation, giving them freedom from relying on ongoing payments and allowing them to meet their financial needs head on.

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