Structured settlements allow claimants to receive all or a portion of their BP settlement award in future periodic payments. With complete customization and unique tax benefits, a structured settlement can help pave the way for secure financial future.
In a typical taxable account scenario, a claimant receives a lump-sum cash settlement and immediately pays taxes of up to 40% on the total cash settlement amount in the year received, and additionally each year on the interest earned in the account. For a taxable structured settlement, the claimant does not pay tax on the structured amount at time of settlement. Instead, the payments are taxed in the year(s) when the periodic payments are received from the life insurance company.
Customized Payment Options
A taxable structured settlement can be customized to meet your specific financial needs. Payments can be in equal amounts or can vary over time, and they can begin immediately or be deferred until needed. Payments can be adjusted for inflation, and they may be scheduled to include future lump sum payouts for such things as educational needs for children or your retirement.
Guaranteed Payments & Rates of Return
Structured settlements offer a low investment risk with guaranteed income and rates of return. Unaffected by stock market volatility, structured settlements provide stable and predictable income.
A taxable structured settlement allows spreading your tax liability out over time as the payments are received. By contrast, a lump sum payment is usually fully taxable immediately upon receipt and often at the maximum rate.
No Ongoing Fees Or Expenses
Unlike other investment options, your taxable structured settlement is free of ongoing fees & management expenses.
Structured Settlements offer protection against divorce, family and friends, and even yourself. All too often, recipients of large cash settlements become the target of the financial pursuits of others. In fact, a recent study showed that of claimants receiving $100,000 or more, 90% had nothing left within 5 years. (Rutler Group, Ltd., TRG 1992)