WHAT IS A STRUCTURED SETTLEMENT?
A structured settlement is a voluntary agreement between an injured party and the defendant in the resolution of a case whereby all or a portion of the settlement funds are paid in the form of future periodic payments. A structured settlement is generally funded through the purchase of an annuity contract or funding agreement from a highly rated life insurance company.
Structured settlements can be tailored to the financial, tax, living and medical needs of plaintiffs and their families and may include the following:
UP FRONT CASH — Funds to cover short term medical expenses and immediate living expenses.
MEDICAL EXPENSE ANNUITIES — Payments to cover the predictable future medical expenses.
INCOME ANNUITIES — Payments to provide income or lost future income of a plaintiff.
SPECIAL ACCOUNT ANNUITIES — Payments "ear marked" for a mortgage payment, home remodeling, vehicle, scholarship fund, etc.
EDUCATION ANNUITIES — Payments to provide for the cost of tuition, room & board and school expenses.
RETIREMENT FUND ANNUITIES — Income tax-free or tax-deferred payments to provide a predictable income stream payable for a certain period of time or for the life of the plaintiff.
Plans may include weekly, monthly, quarterly, semi-annual or annual payments for a short period of time or for the life of the plaintiff. Payments can be level, include a cost of living adjustment (COLA) from 1% to 5% and provide guaranteed lump sum payments.