What types of structured settlements are available and what are the differences?
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UPDATED: Feb 5, 2020
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Life with Period Certain or Life Annuity
Another type of annuity is referred to as either Life with Period Certain or simply a Life Annuity. These are paid in periodic payments 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 the same way with regard 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. There is no provision for a beneficiary to 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.
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 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.