Advantages



1. Money Management:

  • Most claimants and their families are inexperienced and unsophisticated in managing large sums of money.

  • Dissipation of settlement proceeds through mismanagement, imprudent investment, frivolous expenditures, misapplication and neglect is not uncommon.

  • Studies show that 90% of those claimants receiving lump-sum settlements will squander their funds within five (5) years. A settlement, or verdict award, which was intended to last a lifetime, is lost forever.

  • A structured settlement has an inherent automatic spendthrift provision protecting claimants from well-meaning friends, relatives and advisors and allows for guaranteed periodic payments free of investment decisions.

  • A structured settlement can never be prematurely exhausted and will not be subjected to fluctuating market interest rates affecting alternative investments.

2. Financial Security with Minimal Risk:

  • Payments are guaranteed for life or a fixed period and will be paid in the amounts and on dates specified in the settlement agreement.

  • Provides an excellent method of protecting an injured party’s future finances and income, especially in cases involving minors, incompetents or family members in a wrongful death claim.

  • Ideal for replacing lost earnings income for claimants and family members. Income and lump-sum payments are not projections, but guarantees.

3. Totally Tax-Free Income:

  • Under Internal Revenue Code Section 104(a)(2), all payments received under a structured settlement are not subject to federal income taxation.

  • If a lump-sum settlement is invested, any corresponding interest earnings may be taxable.

4. Benefit Matched with Needs:

  • Can be designed to match the particular needs of the claimant in replacing income, life events, meeting living expenses and/or providing for anticipated future medical care costs.

5. Guaranteed Payments:

  • Payments are guaranteed for lifetime or a fixed period.

  • Payments can never be prematurely exhausted.

6. No Administrative Fees:

  • Structured settlement payments will not be encumbered by any other administrative fees or charges, such as investment, consultant, bank trustee, accounting or legal fees.

7. Claim Resolution:

  • Faster, more efficient expediting of the claim process.

  • Provides the claims person with an additional negotiating tool to resolve cases and close files.

 

 


Return to Home Page