Making A Rational Decision About A Structured Settlement Annuity

It is very easy to become aghast by the sheer volume of e-mails, web sites, tv and journal advertising and legal talk when considering the issue of structured settlements or annuities. We will investigate what, exactly, a structured settlement is so that you are better able to understand the concept and be able to make a rational decision.

To begin, let's explore just what a structured settlement is. It is simply a series of guaranteed disbursals - also known as annuities - made over a certain period of time and is usually the result of an injury settlement or another situation in which you are awarded access to a substantial whole amount of money. It is the alternative to accepting an upfront lump sum.

Structured settlements are individualized arrangements meant to help you cover present and forthcoming expenses. By working closely with an experienced attorney or financial advisor you can determine an effective structured settlement to give you the security of a fixed income over a set period of time. This can help you sleep better at night by taking a huge burden off your back.

There are various types of these annuities. You can learn more about them over at http://www.fixmyannuity.com, but here is a brief explanation of each. This is by no means a complete list, but should give you a fair idea of what is out there:

A certain Period Annuity has a certain period of time for the payments to be paid out. They can be made monthly, quarterly, semi-annually or annually. Upon your death, all remaining payments are made to you beneficiary.

A Life Annuity will make periodic contributions for a guaranteed number of years (based on your life expectancy) or for life, whichever is up first. Again, the beneficiary receives any remaining disbursals should you die before the full whole amount is paid.

A Temporary Life Annuity will pay you for a designated number of years if you are still living, so your annuity ends when you die. There?s no provision for a beneficiary to collect remaining disbursals.

In a Life Contingent Lump Sum you?ll receive a lump sum, provided you are alive on the due date. If you die before this date, your beneficiary is not entitled to the whole amount.

Finally, with Lump Sum Option you can set it up to receive the lump sum on a particular date, say, fifteen years from now. Your beneficiary will receive the lump sum on the future date if you have died before then.

So which type is right for you? The best advice we can offer is to do your fact-finding work. Discuss your situation with your financial advisor and family. That way when you make the decision you'll know what your getting and have considered all the options.

Yvonne Volante, the author, is a big fan of annuities and proper planning and writes for fixmyannuity.com, which is the premier annuity resource on the internet. You can see all of the articles over at http://www.fixmyannuity.com