Invest the settlement in an annuity

I read an article about receiving a monthly payment, instead of a lump sum, in the case of an injury settlement.

Briefly:

If a person is involved in an accident at work (workers compensation claim), or a automobile accident, the injured person would usually receive a lump sum as a settlement.

It was felt that the injured person would wisely invest that money so they would have an income for the rest of their lives. As it turns out that was not the case in most situations.

Therefore, in some countries, it was decided that the large sum would be distributed on a periodic basis; monthly, quarterly or annually.

An agreement was made between the injured party, the lawyers (for both sides) a financial advisor and the defendant. The defendant would purchase an annuity for the distribution of funds through an Insurance Company. This distribution allows the injured person to live off the proceeds for a specified duration or the duration of recovery.

The injured party already has the challenge to deal with the after effects and worries of an accident and has to adjust to a new lifestyle. The annuity frees the injury person from the worry of investing the settlement.