WHAT IS A STRUCTURED SETTLEMENT?
A structured settlement is an agreement established voluntarily between a plaintiff and a defendant in which the plaintiff/claimant receives compensation for a damage or wrongdoing. Claimants can obtain a stream of guaranteed income tailored to their unique requirements through structured settlement annuities.
TWO TYPES OF STRUCTURED SETTLEMENTS
Structured Settlement Without Taxes (Physical Injury)
Physical injury settlements can be arranged in such a way that a portion of the settlement profits are invested in an annuity, which provides tax-free payments. Annuities are arranged with the highest-rated life insurance companies available, providing your clients with unrivaled security.
Structured Settlement That Is Taxable (Non-Physical Injury)
The taxable structured settlement annuity applies many of the same features as the tax-free structured settlement annuity to a wide range of situations, giving the claimant with guaranteed and reliable payments as well as a competitive rate of return on a tax-deferred basis.
BENEFITS OF TAX-FREE AND TAXABLE STRUCTURED SETTLEMENTS
1. Tax-Free Income for Physical Injury Cases
The full amount of the damage payment(s) is tax-free, as it is excluded from federal and state income taxes under Internal Revenue Code Section 104(a).
Safe and Reliable
Payments are made to the claimant from one of the safest assets available: An annuity from a well rated life insurance company.
3. Tax-Deferred Income for Non-Physical Injury Cases
The claimant benefits from tax deferral on their payments as well as competitive interest rates.
4. Customized Payment Options
Periodic payments are made to the claimant as needed, as decided at the time of the settlement.
HOW THE SETTLEMENT PROCESS WORKS
TAXABLE STRUCTURED SETTLEMENTS ARE USED IN THE FOLLOWING CASES:
Installation with a Plan Employment Issues in Sales
Discrimination based on age, gender, or race
Deferrals of Attorney Fees
Settlements in Divorce
Litigation Concerning the Environment
Harassment of a sexual nature
Malpractice in the legal field
Disputes over property
Claims for Contract Breach and Fraud