During settlement negotiations, plaintiffs and their attorneys determine the injured party’s ongoing medical care, living and family needs (i.e., possible future medical treatment, in-home nursing expenses, college tuition for dependent children, adjustments to living quarters).

Once the injured party’s needs are determined and a settlement takes place, the defendant (or its insurance company) agrees to the settlement and funds the obligation by purchasing an annuity from a high-rated life insurance company. This insurance carrier or “assignee” then takes over the liability from the defendant and begins making periodic payments to the injured party.