A fixed annuity structured settlement is funded by an insurance company. The insurance company provides a set income to you in exchange for a lump sum from a third party, if the purchase is from a lawsuit.

The fixed annuity gets its name from the fact that the income is a fixed payment based upon set terms. This means that for the length of the annuity, your income is a guaranteed payment each month, or however you set it up to pay out.

You can also have a fixed annuity that can pay out a lump sum payment during the term of the annuity. This is especially great news if you know you are going to have a large expense at set times during the life of the annuity.

If for example you know you will need a home modification or a new accessible vehicle, you can structure the annuity to pay a lump sum at that time to cover the cost of the expense.

Another reason an annuity is considered a “fixed” annuity is based on its type of investment. By having a fixed annuity, the annuity is based on a secure means of investment, often times a government bond or other steady and safe investment.

Choosing a fixed annuity over a variable annuity is often times the best choice you can make. Especially with the volatility of the stock market, which is what a variable based annuity is funded from, you don’t want to risk your income.

If you are looking to have a steady income for life potentially, then a fixed annuity structured settlement is the most secure option for you to look into. With the tax benefits, guaranteed income and safety of knowing your income is set no matter what, the option is still yours to choose.

There are many different options that you can choose from when setting up a structured settlement, hence the term “structured settlement”.  This is by far the most popular option when receiving a judgment or settlement from a lawsuit, auto accident settlement or workers compensation claim.

But, how exactly do the annuity payments work?  What are your options with the structured settlement annuity payments?

First, you need to consider a couple of things about yourself and your current financial condition.  The payments you will receive are usually guaranteed for a certain amount of time.  Most of the time 30 years is the average.  So, you need to consider your age.  If you are older and 30 years will extend beyond your life expectancy, you might want to consider a shorter term or different structure option.

Another consideration is what current and future medical expenses do you anticipate?  Did you know that you can also plan into your structured settlement annuity payments for lump sum payments?  If you know in 10 years you will need a new wheelchair, for example, you can factor a lump sum payment in 10 years that will cover the cost.

Many times the payments that you receive from the structured settlement are going to be a fixed monthly amount.  There can be some variances based upon the exact terms that you put into the annuity, like lump sums, length of terms and beneficiary.

Once the annuity is purchased, your payments will begin.  You can set it up to have the money directly deposited into your account, or you can have a check mailed to you.

Another consideration about the structured settlement payments that you need to think about is the length of term that the payments will be for.  You can make the payments guaranteed income for a set term of years, but sometimes the option is there for them to continue beyond that guaranteed period if the person that is receiving the payments is still alive.

The guaranteed annuity payments are fixed income for the life of the annuity.  There are so many different ways to set up the structured settlement annuity payments that when you are considering this, the possibilities are almost unlimited.