Structured settlements
Advantages of a structured settlement
Most claimants use a structured settlement alongside a lump sum, not instead of one. The reasons come down to four things: tax-free guaranteed income, money management, flexibility, and financial security.
Tax-free income
The rate of return advantage
The most attractive feature of a structured settlement is its tax-free return. Every payment from an annuity bought by the defendant as part of a personal injury settlement, including the interest earned on the original investment, is tax-free when the claimant receives it.
Income from investing an all-cash settlement is taxed at federal rates of up to 37%, plus state income tax in most states.
Getting a structured settlement at the time of settlement is the only way to extend the tax-free benefit into the future.
Money management
Payments that match the loss
The loss behind a settlement usually plays out over time: lost income or higher medical costs that may last years, or a lifetime. The most secure way to make sure the money is there is a settlement that pays out over the same period as the loss.
There is strong evidence that claimants paid entirely in one lump sum face heavy pressure from family and friends to spend it too soon.
A structured settlement sets you up for a strong financial future, with steady payments that help protect you from over-spending.
Flexibility
A schedule built around your life
Payments can be scheduled with almost unlimited flexibility, with the timing and amounts fixed at settlement. They can be monthly, quarterly or annual; rise over time to allow for inflation; run for life or end on a set date.
Larger one-time payments can be planned for known future costs, such as college tuition, a house purchase or extraordinary medical care.
Financial security
Only financially strong insurers
Settlement Advisors places annuities only with financially strong insurance companies. Every one holds one of the three highest ratings from A.M. Best, the main firm that monitors insurers' financial strength, and very high ratings from Standard & Poor's or Moody's as well.
Talk with our brokers about your case
No pressure and no jargon. A short conversation is often the clearest way to see your options.