What is a Structured Settlement?

A structured settlement is a payment of damages, over time, to an injured party.  Payments are flexible and are tailored to meet the individual needs of the claimant.  These payments can be scheduled for any length of time, even for the lifetime of the claimant.  Payments can be structured as a lump sum(s) made in the future, as a stream of payments for a specified period of time or for life or a combination of both.  Future payments are predictible and dependable, allowing the claimant the security of knowing their future income.

Structured settlements are most commonly funded through a fixed annuity purchased from an insurance company.  This provides a high degree of security to the claimant.  Superior Settlements has partnered with the top Structured Settlement Annuity providers in the country, all of whom enjoy high ratings from A.M. Best Company.

Tax Codes affecting Structured Settlements

Structured Settlements are governed by the Internal Revenue Code under section 104(a)(2).  This code section allows compensation received because of a personal, physical injury or sickness to be excluded from gross income and it is therefore exempt from income tax.  This exemption holds true whether the money is received as a lump sum payment or as periodic payments.  Therefore, by entering into a Structured Settlement, a claimant gains a tax advantage.

Structured Settlement Advantages

Structured Settlements are an effective way to resolve a claim through tax-free periodic payments.

• No income taxes are owed on the settlement amount or any earnings that result from the annuity.
• Flexible payment patterns to meet the needs of the individual.  These payments can remain the same over the years or increase by a certain amount at a designated time.
• Provide a steady, low-risk source of money and eliminate the expense and concern of managing large sums of money.
• Excellent rates of return with freedom from market volatility.
• Protection against dissipation of funds, the impact of inflation and/or future unexpected expenses.
• High degree of security to payees.
• Maximize settlement benefits: provides more money over time than a lump sum in many cases.
• Payments are guaranteed for a specified period of time or for the life of the claimant.
• Guardianship cases including minors and incompetents.

For more information please contact us at 800-358-0312.

Please view the articles below for additional information on structured settlement annuities.