A structured settlement annuity is often the alternative to lump sum settlements when resolving cases out of court. This involves an agreement for a predetermined amount of cash to be paid out to one party for a fixed length of time. These payments are also known as periodic payments.Also known as periodic payments, these could be made for the duration of the life of the claimant. The payment can be in the form of equal installments or installments of varying amounts. Because these are long-term payments, it is important to get an assurance of the credentials of the annuity provider to ensure that it is capable of meeting the terms of the settlement.The claimant’s monthly expenses, present age, extent of hazard in occupation and retirement plans are considered in determining the start date, duration and frequency of the payment. In some cases, the insurance company making the payment is allowed to transfer its obligation to a third party. All these should be specified in the settlement agreement.In order for the structured settlement annuity to remain tax-free, the structure of payments should not be altered once both parties have agreed on it. However, it is difficult to guarantee that the payments will not lose their value over time because of inflation. Nor can the recipient expect that his financial situation will not change in time and that the payments will always fit the budget.These are some of the reasons that drive people to sell structured settlement payments. Selling future payments in part or whole for lump sum cash allows them to decide what to do with their money to secure their present needs and future financial standing. They can use it to purchase big-ticket items such as a home or a car, to finance their education or just reinvest it where the dividends are greater.There are many institutions that buy structured settlements, with transactions running in the tens of thousands up to millions of dollars. In choosing a settlement purchaser, it is important to look into the past payment records and working relationships with insurance companies. A consistently good payment record and working relationship with various insurance companies means a good chance of the transaction being approved quickly.Being licensed, insured and bonded are other qualities to look for in a purchaser. This means that clients get their cash even if the structured settlement company goes out of business. Most of these companies also offer free consultations, which is a good way of getting to know a prospect better while getting free financial advice at the same time.The decision to keep a structured settlement intact or to sell the payments is a major one. A structured settlement annuity can be a source of great comfort for retired individuals or people with impaired earning ability, since it offers the advantage of a regular income without having to worry about managing it. On the other hand, people who sell structured settlement payments gain control of their own finances, and can use the money from the sale for an alternative investment plan that could earn them more than what they were getting from the settlement. Ideally, however, the latter should be resorted to only if the individual is confident of managing his own finances in a competent manner.