What you should know about a Structured Settlement

Structured Settlements


If you are a claimant in a case involving personal injury or wrongful death, a structured settlement is designed to effectively meet your financial needs with a secure stream of triple tax-free (including federal, state and local) periodic payments.

Structured settlements are typically funded by purchasing one or more annuities from a highly rated life insurance company, which makes the payments to the injured person. These payments may be made for any length of time, even a lifetime. In the event of the injured party's death, the guaranteed portion of the settlement may be made to the estate or a named beneficiary such as a spouse or child.

The flexibility of the structured settlement proposal is limited only by the creativity of the structured settlement broker and the information provided. At Legacy Settlements, the role of our structured settlement consultants is to sit down with you to thoroughly discuss and understand your unique situation and exact financial needs. Your structure consultant then designs proposals that will fund your needs with a secure, triple tax-free stream of future payments.

  • TAX-FREE - IRS Code 104(a)(2) stipulates that periodic payments in the form of a structured settlement are completely tax-free.
  • GUARANTEED - Structured Settlements are funded through the most secure life insurance companies in the world. Learn more about life insurance companies.
  • RATE OF RETURN - Structured Settlements grow at a guaranteed fixed rate of return unaffected by the volatility of the market. The table below illustrates the taxable rate-of-return required to match the return offered by a structured settlement assuming the stated tax brackets.
Stucture Return RateTax Bracket
5.5%7.53% 7.86%8.46%8.96%

* Figures would be even higher with state and local taxes.

Temporary or permanently disabled injured partiesIf you find yourself in any of the following situations, a structured settlement may be a smart solution:

  • Individuals attempting to retain some portion of their settlement for future use
  • Total or partial wage loss for any period of time. Guardianship cases, including minors
  • When the settlement is a large portion of all of the injured party's future support
  • As an alternative to investing part of settlement proceeds
  • Severe injury, especially shortened life expectancy, and cases involving the mentally incompetent
  • Death cases with a surviving spouse and/or children needing monthly/annual income
  • Deferred payments for college funds, retirement, mortgages or attorney fees
  • Workers' compensation cases
  • Any case where a secure, tax-free, high yield income makes sense