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Last Updated August 4, 2008 |
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When a legal case settles for a large sum of money, a structured settlement may be used so that it may be paid over time instead of a lump sum. This device is often used in personal injury and workers' compensation cases. A defendant (or its insurance carrier) purchases one or more annuities to guarantee future payments to the injured person. Alternatively, the defendant may delegate its obligation to a third party who in turn purchases an annuity and makes payments directly to the plaintiff. |
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