Structured settlements are being used more and more these days and consist of agreements where one will agree to pay someone, and this will probably be a bank or company, a certain amount but which will not come all at one time. In fact, a structured settlement is usually used to settle claims for personal injury when a legal case has been filed.

This works in a way to ensure that the injured party has regular payments through his life to cater for medical treatments etc which may be ongoing over a number of years. This works when a judgment has been made by the court but instead of taking the whole amount in cash, the plaintiff can opt to get payments over the years to cater for his needs.

The defendant, on his part, will usually assign his obligation with a life insurance policy and it is this company which will pay out the amounts as directed. The life insurance company, for example, will have insured the defendant and will not pay him out on his death since payments will be made to the injured party instead. This annuity will then stabilize the income of the injured party so that they can get the treatment that they need when they need it and all because they were injured by the defendant in the first place.

There are some benefits to this kind of payment and one is that the taxman does not take his cut. The principal and the interest that is generated are both tax free so this is quite a saving over the years. It also means that the annuities can be formed to meet the future needs of the injured party exactly. This could include future living expenses or even an income for retirement.

The income coming in future years can even be of unequal amounts too. It is up to the beneficiary and the company to work out when they need more money and when they can manage on less. This, for example, could encompass school fees when the kids get to a certain age, or it could just take into account holidays and such when more income is needed at specific times of the year. In fact, there are many different ways to work out these figures and it is just down to personal needs. For those who have been damaged beyond where they can expect to earn a reliable income, and this is often those people who have spinal or neck injuries, this is a great way to get a definite income so that they can relax and make the most of their lives. The guaranteed income means that even if the person is able to work now and then, they do not have to worry about mortgage payments and such since this will be covered already. A plaintiff loyal planner will be needed to ensure that the injured party gets the best deal and to discuss whether this kind of plan is the best way to settle the case.

Author Bio: Ellie Lewis recently researched a landmarkstructured settlement case for an article. She learned that structured settlements are the best alternative in some cases.

Category: Finances
Keywords: structured settlement,structured settlements