Annuity Payments
Payment Options
There are a variety of annuity payment options that can be arranged in a
structured settlement. The individual and their attorney should thoroughly
discuss each one to insure that their future needs will be met
appropriately. A few of the payment options that may be offered by an
annuity issuer are: Life - Annuity payments are made for as long as the
annuitant lives for the "period certain," whichever is longer. Payments
may be leveled or at an increasing rate; Period Certain - This calls for
regular repeating annuity payments of a specified amount. The payment
amount may be level or increasing regularly (typically annually) by a
specific percentage or in fixed steps to help keep up with the cost of
inflation. Payments can be weekly, monthly, quarterly, semiannually or
annually; and Installment Refund - Annuity payments are made for as long
as the annuitant lives. Payments terminate when the annuitant dies, unless
total benefits paid at that time are less than the cost of the annuity. In
such an event, annuity payments are made until the total benefits equal
the cost of the annuity.
No matter what option is provided to an individual, they need to really
examine what their needs are at the onset as well as what they will be
down the road. Things change in life, so it should be closely examined
what will affect those changes when making a decision. Thankfully, the
structured settlement is reviewed by the court prior to going into effect.
This certainly helps to protect individuals from being misled or outwardly
defrauded.
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