If a case is resolved with a personal injury annuity, the settlement fund typically goes to a third party insurance company that manages structured settlements and/or personal injury annuity cases. Rather than receiving one large amount of money from the defendant, you might receive periodic payments over the course of a fixed number of months or years.
In order for a defendant to carry out these periodic payments, a defendant may purchase an annuity from an insurance company. This removes the obligation from the defendant’s books and transfers the responsibility over to a payment company that has experience in managing periodic payments.
From the defendant’s perspective, some experts argue that placing the personal injury annuity with an insurance company is a much more stable and reliable way to get payments rather than relying on the financial stability and help of a defendant.
Personal injury annuities are a sort of insurance product that ensures that a series of payments are made over time to meet the terms of the annuity. They may be paid out over the lifetime of a beneficiary or are tied to a certain amount of principal that is paid to the beneficiary or to his/her heirs until the balance is fully paid.
A structured settlement can be negotiated to whichever terms the plaintiff likes in many cases. A large payment can be requested up front to take care of any existing medical bills and to pay for bills that resulted from missed work related to the injury. Payments can continue over time at lesser amounts as medical bills diminish over time. On the other hand, claimants may want payments to increase over time for medical bills that might grow or to compensate for other expenses, such as growing children that the claimant cannot provide for due to injury. A structured settlement can be tailored to meet your unique needs or that of your client.
Some specific options structured settlement annuities can be designed include:
- A large initial payment: If a person has been unemployed for a significant amount of time and his or her bills are mounting, a personal injury annuity can be created to offer a large initial payment so the injured party can pay off overdue bills, a mortgage or purchase items needed, such as a new car. Any subsequent payments can be smaller to act as a substitute for income lost.
- Additional amounts of money for extra expenses: Some personal injury annuities are designed to offer a yearly income and additional amounts of money to pay extraordinary expenses, such as college tuition.
- Payments that increase over time: Structured settlements personal injury cases can also begin relatively low and end higher as they are designed to increase payments over the years.
- Delayed payments: Some plaintiffs opt to have their personal injury structured settlement payments delayed, putting their awards off until retirement.
Structured Settlements Personal Injury Cases Payouts
The purpose of a structured settlement/annuity is to help a person to be whole again. The primary goal is not to put the injured party in a financial position that is better than he or she was once in, but to cover any expenses he or she has incurred out of pocket as a result of the incident and to obtain funds to cover future expenses while helping them to get back to as much normalcy in life as possible.
Predicting future payments is almost more important than tallying up the cost of expenses already received as a result of the personal injury. Treatments including chiropractic care and physical therapy can last for many years after an injury – sometimes for a lifetime.
Some factors to keep in mind when determining a proper personal injury settlement amount include:
- Amount of lost income
- Accumulated medical bills
- Length of medical treatment
- Receiving a long-term diagnosis
- Long-term treatment or treatment post-accident
- Possible damages for pain and suffering for the injured party and potentially family members
In order to fully explore and pursue payment amounts and payments for a personal injury case, the help of a professional is highly recommended. Working with an attorney is invaluable for seeking the compensation you deserve in addition to helping you better understand the claims processes and how much of a settlement you might expect to receive.
It is important to know that personal injury lawsuits are intended to protect the rights of the victim. It is imperative that victims reach out to an attorney as promptly as possible in order to be compensated. Some states have limits on how long a claimant can file a claim, such as Alabama, which has a two year time limit. If a claim is made after two years, the injured party may not be eligible to receive any financial compensation.