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Structured Settlements

What is a Structured Settlement?

A Structured Settlement is a customized stream of future periodic payments widely used for decades to resolve a personal injury, wrongful death and workers’ compensation claim settlements.  Instead of a lump sum settlement, a personal injury victim has the opportunity to receive all or part of their settlement in the form of future periodic payments funded through highly-rated Life Insurance Companies.  A structured settlement is unique in that it provides guaranteed tax free payments paid for life or a specific period of time.  They offer a wide range of payment designs including monthly, quarterly, semi-annual, or annual fixed amounts or a predetermined cost of living adjustment. Payment programs could also include preset lump sum payment distributions.

Objectives of a Structured Settlement

The objective of a Structured Settlement is safety, security, guaranteed tax-exempt returns, and protection from the dissipation of the settlement funds too quickly. A structured settlement is not an investment or market-based product. It is an insurance policy through a life insurance company that generates reliable tax-free payments at low risk.

Structured Settlements are crucial in funding Medicare Set Aside Arrangements, Medical Trusts & Special Needs Trust

Medicare Set-Aside arrangements

The Centers for Medicare & Medicaid Services (CMS), a federal agency, allows for a Medicare Set-Aside to be funded over time using structured settlement payments versus a lump sum payment and is advantageous to the injured worker and the employer or its workers compensation carrier.

The Unique Benefits of Tax-Exempt Structured Settlements

  • One-Time exclusive option for a personal injury victim, but only at the time of their claim settlement
  • Lifetime payments the personal injury victim cannot outlive
  • Special pricing for impaired individuals
  • 100% Tax-Exempt payments (Principal amount and the earned Interest)
  • Protection from creditors, judgments, the premature dissipation of funds, and in most cases, marital distribution
  • Guaranteed Returns
  • Exclusion of the 10% penalty rule for disbursements                     before age 59 ½
  • Commutation and Cost of Living Adjustment riders
  • Continuation of payments to beneficiaries on a tax-exempt basis
  • Structured Settlements offered through highly rated and regulated life insurance companies
  • No yearly or management fees are associated with structured settlements

Settlement Structure

  1. Life with Period Certain Annuity – provides equal payments to the plaintiff throughout his/her lifetime with a guaranteed period
  2. Period Certain Annuity – provides equal payments for a guaranteed period
  3. Guaranteed Lump Sum Payment – provides a payment on a specific date(s)
  4. Joint and Survivor Annuity – provides equal payments to the plaintiff and spouse for as long as they both live with payments continuing at 100% to the survivor.
  5. Temporary Life Annuity – provides equal payments for as long as the plaintiff is living but only up to a specific number of years.

Essential Information

Personal Injury & Wrongful Death

A physical injury or the death of a loved one is emotionally and financially devastating and can affect every aspect of your life. 

A catastrophic accident or medical mistake often leaves a personal injury victim disabled and impacts their earning capacity significantly.   Their injuries prevent them from returning to the workforce and reduces their earning power.   When the primary or sole income provider dies, the spouse may be forced to make major changes in their life, such as moving from their home because it is no longer affordable or not being able to pay for their child’s education.

A structured settlement can help ease these heavy financial burdens with guaranteed tax-exempt payment streams designed to provide long-term financial stability.

Tax-Exempt Structured Settlements

400 Kelby Street, Parker Plaza, Suite 1606 | Fort Lee, NJ 07024
Toll Free: 800-474-3863
Phone: 201-585-9231

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