TOP 5 Profits of structured settlements

Structured settlements for claimants involved in personal injury, workers’ compensation, and wrongful death cases offer a number of advantages, making them a desirable alternative to accepting a cash settlement. Here are five of the top reasons to choose a structured settlement:

1- 100% Tax-Free Payments Including Interest Earned IRS Code § 104(a)(2) stipulates that periodic payments in the form of a structured settlement annuity are 100% free from federal, state, and local income tax—including any interest earned on the annuity. While the proceeds of a cash settlement are tax-free, the interest earned on money invested from the settlement could be taxable.

2. No Ongoing Fees or Expenses

Unlike most investment vehicles, structured settlements contain no yearly management fees or cost to the claimant once the money is invested.

3. Guaranteed Rate of Return

When a structured settlement is placed, the rate of return is guaranteed for the life of the annuity. The structured settlement can then grow without any regard to the volatility of the market. Additionally, when coupled with its tax-free status and lack of ongoing fees or expenses, a structured settlement often outperforms investment options offered within the equity market.

4. Flexibility of Design

Payments can be made on a monthly, quarterly, semi-annual or annual basis, or in the form of a lump sum. The flexibility makes it possible to customize the structured settlement to supplement monthly income, to pay for expenses such as college or retirement, or to use for a large purchase, such as a house.

5. Safety

Structured settlements are some of the safest investments in the market. Reputable settlement planning firms will only place structured settlements with life insurance companies that have an A-rating or better, providing a guaranteed future income source.