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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?
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Why Would a Claimant Want One?

Structured Settlement Advantages:

  • Tax-advantaged Income Payments received on account of personal physical injury or physical sickness are entirely excluded from gross income under Internal Revenue Code Section 104. Non-physical injuries may be tax-deferred if properly structured. This is true whether the money is received as a lump sum or as periodic payments. Money saved on taxes translates directly into higher net income for claimants.

  • Financial Security Future income is guaranteed for certain periods of time and/or for life, depending on need. The annuity contracts used to back structured settlements are issued only by life insurance companies with top-tier credit ratings.

  • Spendthrift Protection Since payments are delivered in measured doses, recipients are protected from undisciplined spending. With proper planning you can ensure that claimants will have money for years to come, safe from financial mistakes and settlement predators.

  • Design Flexibility Future payments can be tailored to meet specific future economic needs, such as wage replacement, medical care, college funding and/or retirement.

  • Lifetime Payments While most people naturally consider the risk of early death, many face the risk of living too long— specifically, outliving the amount of money set aside for their care. Annuity contracts are the only investment vehicles that address longevity risk. By purchasing lifetime benefits, you can shift the risk of living too long from the injured person to the annuity issuer.

By eliminating or reducing the tax on investment income, structured settlements effectively increase the claimant’s purchasing power beyond what is possible through conventional investment of a lump sum. They represents a unique financial advantage when done correctly and in appropriate proportion.