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FAQ for Claim Professionals
  1. Introduction
  2. What is a Structured Settlement?
  3. Why would a claimant want one?
  4. Why wouldn't they want one?
  5. How can the claimant manage the disadvantages?
  6. Why does my company want me to use them?
  7. Which kinds of cases are good candidates for structures?
  8. Which cases are not?
  9. What about case size?
  10. How do I get started?
  11. What's a typical negotiating scenario?
  12. What if the Claimant says no?
  13. Approved annuity issuers
  14. Why annuities?
  15. Annuity Pricing
  16. Reduced life expectancy discounts
  17. What is an "assignment"?
  18. Structure of the deal
  19. Insurance company ratings
  20. The closing process
  21. What do settlement brokers do?
  22. How are brokers paid?
  23. What if the claimant has their own broker?
Home Page > "How to" For Claims Professionals >ABC's

Which Cases Are Not Good Candidates for Structures?

Despite the many advantages, some cases should probably not be structured.
  • Income Needs Shorter Than Five Years Structured settlements are designed to generate long-term income; the low yields offered by short-term investments are generally insufficient to cover the administrative costs of setting up the structure while still delivering competitive returns. For this reason, unless the plaintiff is a minor, it is generally not advisable to fund short-term payments with structured settlements.
  • [This is true for physical injury cases. The harsh tax treatment to which non-physical tort recoveries are subject may create exceptions to this rule.]

  • Known Liquidity Requirement to the extent is it likely that funds will be needed in the near future (for surgery, down-payment on a house, etc.), it is best to set needed amounts aside in the cash portion of the settlement. The claimant should deposit these funds in the bank rather than building them into the structure.