A structured annuity is a financial tool used in resolution of personal and physical injuries of plaintiffs. Normally, they are tax free, have a determined monetary installments and the period in which they are to be settled. In the world today, there are specialists that aid in the facilitating the settlements through negotiation and agreements on behalf of the plaintiff.
Benefits of structured annuities to claimants
To begin with, structured annuities can be customized to suit the needs of an injured party. This is where the party gets to have it designed according to their financial needs. A given time period for their validity is done to favor the financial future of plaintiffs.
Structured annuities promote the financial security and stability of the claimant. This is because their contingency expenses are met just when required, for example medical expenses hence securing their future. In addition to this, the financial security of plaintiffs’ dependents is assured even upon their death.
It promotes financial security. This is where the claimant is assured of professional advice on how to use the structured annuity over a given time. He is also dependent on the professionalism of a highly rated financial institution such as an insurance firm.
Lastly, the claimant gets maximized benefits in using structured annuities as a means of compensation. This is because it creates surety of payments irrespective of the lifespan of the injured party. This is usually transferable to the beneficiaries of claimant in case of his death.
Benefits of structured annuities to defendants
In the fast place, structured annuities reduce costs that could have been incurred in a lump sum settlement of the injury. Recall that lump sum settlements may affect the financial future of a defendant that may not afford a full settlement in the first place. It also buys time for a defendant to consolidate their funds.
A structure annuity allows for tax deduction. This is in a case where a defendant is self-insured and may need a tax relief for such a transaction. Remember settlement incomes in most countries are usually tax free hence offer a relief to the defendant.
In addition to this, one gets to avoid jury trials. This is where, in case of a financial distress and the defendant is not able to afford a full settlement as ordered by the court of law, one may be taken to court. Structured annuities save defendants the stress of facing juries in case of default in payment of a given installments in cases of financial problem.
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