> Structured Settlements > What Is An Structured Settlement Exactly?
It is an annuity issued by an insurance company. An annuity is the mathematical liquidation of both principal and interest. Why a structured settlement annuity is special is that it has a tax free payout. That is why a structured settlement annuity is used in lawsuit settlements. When a amount is determined (an award) the insurance company can take that amount, figure what the interest will be for the future and come up with a guaranteed amount that will be paid out over a certain number of years. That amount can be paid monthly, quarterly semi- annually, annually or in a number of lump sum payments. The annuity is a useful financial tool.
Speaking of the annuity as a useful financial tool, they are used to pay out large lottery and casino winnings. Many times you will hear of a million dollar winning only to found out that its paid over 26 years. Its more like a $325,000 winning plus interest add in to equal 26 payments amounting to a total of one Million dollars.
When selling an annuity such as a structured settlement or a lottery and casino winning, be sure to find an ethical broker or company to sell to. Once the sale is make you can?t get your annuity back.Frank ReCouper Sr. is President of FDR Resources and has been in financial services for over 45 years. For more information: http://www.money-now.net/structured_settlement_resources.htm or http://www.rp-capital.com
Writen By : Frank ReCouper
Source: http://bestfinancialarticles.com/14931/what-is-an-structured-settlement-exactly/
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