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What are the options for structured settlement benefit payments?
Depending on the particular needs of the Payee, structured settlement payment options might include one or more of the following types of customizable cash flows, which can be paid directly to the Payee, to a trust set up for the benefit of the Payee, and if desired can be made via electronic funds transfer ("EFT") to the bank account of the Payee:
| Life
Annuities |
that provide lifetime guaranteed structured settlement income and maintain the Plaintiff or Payee's current standard of living. Depending on the annuity issuer, structured settlement payments may be made weekly, bi-weekly, monthly, quarterly, semi-annually, annually, every other year, temporary life or other payment modes. A death benefit (also known as a certain period or guarantee period) can be associated with the payments so that benefits will be paid for the certain period whether or not the Payee survives the entire payment schedule. For example a quote of $4,000 per month for life with 30 years certain means that payments will continue for 30 years (360 months) or the life of the Payee, whichever is longer. |
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Deferred Lump-Sum Payments
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that can be made at pre-determined time periods for special funding needs such as college education, future medical costs, retirement planning, reinvestment and as a hedge against inflation. Lump sums can be guaranteed (most common) or life contingent. |
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Step
Annuities
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provide structured settlement income that incorporates graduated increases over the initial payment amount for a fixed period and/or lifetime.
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| Percentage
Increase Annuities |
like Step Annuities, provide graduated increases over the initial payment amount by using a fixed percentage to provide annually increasing income as a protection against inflation.(some carriers go as high as 10%, and in the UK an option is available to adjust to the RPI to comply with Periodical Payment Orders) |
| Deferred Defined Benefit Annuities |
permit a Payee to defer the start of structured settlement payments to a later date, if desired, with a known benefit payment. |
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Period
Certain Annuities
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different modal structured settlement payments may be utilized when income is only needed for a specific time period. Modal Payments can be combined with a lump sum payment, at the end of a specific structured settlement payment period, to simulate the cash flow from a bond held to maturity. |
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Joint
and Survivor Annuities
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can be purchased for two separate annuitants under one contract, whereupon joint and survivor payments will continue to the surviving annuitant after the primary annuitant's death at a rate equal to, or at a predetermined percentage of, the original benefit. |
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Variable Income Payout Annuities**
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which allow the plaintiff or payee to participate in the returns of the equity markets with the same tax favored status as traditional structured settlements. Income payments will fluctuate to reflect the performance of the investment portfolios underlying the selected investment divisions and can be structured in various ways such as a life only, period certain, life with a period certain, deferred payout, joint and survivor and a quasi-lump sum basis.
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**available only through appropriately licensed, registered and appointed structured settlement brokers who are affiliated with a registered broker-dealer. Other underwriting rules apply.
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The design possibilities of a structure are only limited by your imagination.
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