Structured Settlements
A structured settlement provides customized, tax-advantaged payments guaranteed by top-rated insurers to bring financial stability and security to injury or accidental death victims and their families.
What Is a Structured Settlement?
Personal injuries and accidental deaths create trauma and instability for individuals and their families. Beyond the physical and emotional challenges, many people face severe, long-term financial uncertainty. A structured settlement can help you establish the financial stability and security you need during this difficult time.
A structured settlement is a customized payment plan most commonly guaranteed by highly rated life insurance companies. It provides regular, tax-advantaged income designed specifically around your needs—whether that’s covering future medical care, replacing lost income, funding education, or planning for retirement. Unlike a lump sum that can be quickly spent or poorly invested, a structured settlement delivers reliable income when you need it most.
Structured Settlements Explained
Key Benefits of Structured Settlements
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- Tax-Advantaged Income – Federal tax law provides significant benefits for structured settlements. Claimants with physical injury claims (Internal Revenue Code Sign up for Finn Financial Group’s newsletter § 104(a)(1) & (2)) receive settlement proceeds and all future growth 100% income tax-free. Claimants with non-physical injury claims, such as employment disputes, benefit from tax-deferred growth on their principal and interest, with taxes paid only when they receive payments.
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- Safety and Security – Your payments are typically guaranteed by highly rated life insurance companies—many with over a century of financial stability. Multiple layers of consumer protection rules safeguard your payment stream.
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- Stability – Unlike investments subject to market volatility, structured settlement annuities provide guaranteed payments regardless of economic conditions. Your income is predictable and secure.
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- Customized to Your Life – You design the payment schedule around your specific needs—medical expenses, educational costs, living expenses, retirement income, or any combination that works for your situation.
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- Important to Know – Structured settlements are only available when resolving personal injury claims (both physical and non-physical) and must be arranged before your settlement is finalized. Once you receive a lump sum payment, you cannot structure it afterward.
Frequently Asked Questions About Structured Settlements
Q: What is a structured settlement?
A: A structured settlement is a customized, tax-advantaged payment plan that provides guaranteed income over time — rather than a single lump sum — following a personal injury or wrongful death claim. Payments are typically funded through annuities issued by highly rated life insurance companies and are 100% income tax-free for physical injury claimants under IRC § 104.
Q: Who is eligible for a structured settlement?
A: Structured settlements are available to individuals resolving personal injury claims — both physical and non-physical. Physical injury claimants (auto accidents, medical malpractice, slip and fall, etc.) receive payments completely income tax-free. Claimants with non-physical injury claims (employment disputes, discrimination, etc.) benefit from tax-deferred growth and tax efficiency. The settlement must be structured before it is finalized — you cannot structure a lump sum after you’ve already received it.
Q: How are structured settlement payments guaranteed?
A: Your payments are backed by highly rated life insurance companies — many with over a century of financial stability — and are further protected by multiple layers of state consumer protection laws and guaranty fund provisions. Unlike stock market investments, structured settlement annuities provide fixed, predictable income regardless of economic conditions.
Q: Can I customize my structured settlement payment schedule?
A: Yes. Payments can be designed to begin immediately or at a future date, cover anticipated medical expenses, fund education, replace lost income, provide a lump sum at retirement, or any combination that fits your life situation.
Q: Does my attorney need to structure their fees for me to structure my settlement?
A: No. Your structured settlement and any fees your attorney may choose to structure are completely independent arrangements. You can structure your recovery regardless of what your attorney decides to do.