Summit Structured Settlements
755 S.E. Frontier Suite 101
Waukee, Iowa 50263
Voice: 515.987.6888
Fax: 515.987.6999
Toll Free: 866.267.1177
info@summitsettlements.com
Disclaimer
|
What is a structured settlement?
|
A structured settlement is the payment of money for a personal/physical injury claim
where all or part of the settlement calls for future periodic payments. These
periodic payments are funded through an annuity purchased from a major life
insurance company or Treasury Bond Trusts. By using highly rated and nationally
recognized well-known
life insurers or U.S. Treasury Bonds, you can be assured of financial security
throughout the period that the payments are due under the proposal.
In the case of lawsuits settled out of court, an increasingly popular alternative to a
lump-sum payment is a structured settlement, which is a series of payments to
the plaintiff over an agreed-upon time, including lifetime. Typically, the
payments are funded through an insurance company annuity or through U.S.
Treasury Bonds. Rather than receiving them in one lump sum, the plaintiff will
receive a stream of tax-free payments tailored to meet future medical expenses
and basic living needs. The settlement may build in an inflation factor so that
payments periodically increase in size.
One advantage of structured settlements is they can be designed in a variety of
ways. The structured settlement can include a lump-sum payment to pay up front
for accumulated medical bills, attorney fees, and costs. It can include lump-sum
payments at specific times in the future to pay for college tuition or to fund
retirement at 65, with the bulk of the money being paid out in periodic, usually
monthly, payments.
One very obvious benefit of a structured settlement is that it eliminates the
risk of the recipient, whether a minor, incompetent, or disabled person,
squandering the money in a short time.
Another benefit is financial: When Congress amended the federal tax code to
encourage structured settlements, it explicitly provided that 100 percent of
every structured settlement payment would be exempt from federal taxes.
Guaranteed lifetime payments often stop at the recipients death. If a victim lives a
normal life expectancy (which is what the periodic payments are based upon),
everything works out. If the recipient dies earlier than expected, the survivors
may find themselves with a loss of income they were counting on. The structured
settlement may be designed to continue payments to the victim's beneficiaries
for a limited period after death.
Before entering into a structured settlement agreement, consult with one of our qualified,
experienced structured settlement brokers. |
|