An annuity broker, or structured settlement broker, negotiates the buyout of structured settlement annuities to determine the payout schedule after an individual has won their lawsuit. Usually, the annuity was awarded in a lawsuit concerning a personal injury often due to willful misconduct or negligence of the defendant. The compensation for the injury is an amount paid out as the settlement in the case, which is not usually determined through a jury trial.
Many times, a structured settlement broker will provide an alternative to a lump sum payment. The annuity will be provided by an insurance or annuity company that has a payment schedule that provides money every month, quarter or year. To acquire an annuity, the defendant (losing party) will make a one-time premium payment to the insurance company in exchange for a payout schedule for the awarded party.
Determining the Settlement Value
One of the most critical duties completed by the structured settlement broker is determining the value of the settlement. By calculating medical costs (past and future), incurred by the injured party along with all the associated needs including a home nurse, physical therapy, medicines, and any needed surgery in the future, the broker can determine the economic costs of the case.
The structured settlement broker will also determine non-economic costs including mental anguish, disfigurement, pain and suffering, inconvenience, well-being, mental health, and any loss of consortium – the diminished affection, cooperation, aid and intimacy between wife and husband. Determining the past, present and future burden placed on the injured party helps the broker calculate a rough estimate of the current loss, and any expected future loss.
The projections made by a structured settlement broker are a key component to being able to construct a settlement in the court case. The functions and responsibility of a broker are crucial in many personal injury cases where damages are challenging to calculate.
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