As an investor who would like to plan for retirement, you may have studied various options, and locked down your interest to annuities. You may be wondering, what is annuity, and the various types of annuities that are available for you to invest in. An annuity gives you the option of investing your money after signing a contract with an insurance company, and getting payments after an agreed period of time.
One of the types of annuities is a structured settlement annuity, and the individual who asked what is annuity, may want to lock down their interests to this type of annuity. This type of annuity is reached upon after a court settlement, and the plaintiff is paid for a specific period of time after a lawsuit. The defendant who lost is the one who purchases this type of annuity, especially if the payment is to be made over a long period of time, especially if the payments are supposed to be paid for a duration that may exceed the defendants life time.
An individual who wants to know what is annuity should know that this option is available only to individuals after a court of law has ruled that they should be paid a certain amount of money, usually for the rest of their life. This is usually after an injury, especially in the work environment where the plaintiff may have been injured to the extent that they may not be able to work again. The injured party is assured of income for the rest of their life as a result, and this income is meant to help them with their daily expenses, as well as medical expenses that may be as a result of the major injury.
The individual who asked what is annuity may want to know what the advantage of such a settlement is, and the answer is that, like any other annuity, such a settlement is exempt from tax during the accumulation phase, and payment is guaranteed for the number of years determined by the court.
The individual who wants to know what is annuity could be advised that such a settlement could be requested by the plaintiff through their lawyer during trial, as a compensation for major injuries, and when granted, the defendant will be required to purchase annuity for the aggrieved party from an insurance company.
This type of settlement could also be reached upon outside the law courts with the hope that the individual will drop the charges. A defendant could ask the plaintiff to settle outside court by committing themselves to paying the individual a certain amount of money for a certain period of time through an insurance company in the form of annuities.
There are a lot of documents that need signing in a structured settlement annuity, especially considering that it is a legally binding agreement that is usually issued by a court of law or its representatives. However, it is a good way to compensate individuals who may have lost their means of livelihood due to a serious injury, and who may be faced with extra expenses due to hospital bills.