Q: What is a Structured Settlement?
A: A Structured Settlement is an alternative to a lump sum cash payment in the resolution of personal injury, wrongful death or workers' compensation cases. The settlement usually consists of two components: an up front cash payment to provide for immediate needs and a series of future periodic payments which are funded by the defendant's purchase of an annuity policy or reinsurance from a life insurer who makes the periodic payments directly to the plaintiff.
Q: When is a Structured Settlement Appropriate?
A: It is most advantageous when the plaintiff requires funds over a period of time. Typical examples include:
- Plaintiffs who require continuing future medical expenses.
- Plaintiffs (or dependents) who require replacement of lost future income.
- Plaintiffs who require a secure lifetime tax-free income.
- Plaintiffs who are uncomfortable with managing money.
- Any case involving a minor, since courts usually will not allow payments to be made directly to the minor until he or she reaches the age of majority.
- Workers' compensation total disability or death claims.
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Earn More with a Structured Settlement
Structured settlements: Better returns and excellent security
If you choose a structured settlement to resolve an injury or wrongful death claim, you'll get more than guaranteed payments and peace-of-mind. You'll also get excellent returns.
Look at the charts below. On the left is a sample case involving someone who wants payments to begin immediately. On the right is an example of how structured settlements can be deferred to provide greater retirement security.
Read more: Earn More with a Structured Settlement
Earn More with a Structured Settlement (en Espanol)
Portafolio Gravable contra Indemnización Estructurada Libre de Impuestos
Esta tabla muestra las tremendas ventajas de una indemnización estructurada contra un pago único global. Compare los retornos de dos indemnizaciones hipotéticas por $100,000. Una es invertida en inversiones convencionales gravables a una tasa de interés de 6 por ciento. La otra fluye a través de una indemnización estructurada ganando la misma tasa.