Structured settlements
What is a structured settlement?
A structured settlement is a series of future payments, accepted as part of a settlement in addition to any up-front cash payment. By taking payments over time, the total guaranteed benefit grows, and in the case of personal injury lawsuits, that growth is entirely tax-free.
The options
What the future payments can look like
A structure is built around the claimant's real needs. It can combine any of these:
Future lump sums
One or more large payments on set dates, for education, retirement, buying a home or a future investment.
A series of payments
Annual payments for college, or monthly payments to replace income or cover care.
Payments for life
Income and care payments for as long as the annuitant lives, which removes the risk of outliving the settlement.
Cost of living increases
Payments that rise over time to keep up with life's rising costs.
Requirements
How to make a settlement a structured settlement
- Settlement Advisors produces a proposal for the structure, and all of the parties to the suit agree to its terms.
- The defendant or its insurer buys the annuity directly, so the future payments are tax-free to the claimant. In some cases a court-supervised trust can buy it instead.
- A Settlement Agreement and Release signed by the defendant or insurer and by the claimant.
- An assignment agreement that moves the obligation to make the future payments from the defendant or insurer to the assignee, an affiliate of the life insurance company issuing the annuity.
Our role
How Settlement Advisors works
We work closely with claimants and their attorneys to plan for the claimant's future financial needs. That means setting the best schedule for the future payments, getting the best pricing in the life insurance market, documenting the payments, assignment and annuity in the release, and preparing and submitting the annuity paperwork.
The process
What working with us looks like
We put together proposals that lay out what a structure for your case could look like.
The parties review the proposals and choose the one that works best.
We work with life insurers to find the best possible return for that structure and present the final annuity quote.
All parties agree to the structure, the defense funds the annuity, and we complete all of the paperwork to execute it.
Once the settlement is final, the life insurer issues a contract setting out its commitment to make the future payments.
We stay available to help with any questions or issues about the annuity for years to come.
Don't hesitate to request proposals. We're always happy to put together options and discuss how a structure might help resolve a case. Get in touch.
Talk with our brokers about your case
No pressure and no jargon. A short conversation is often the clearest way to see your options.