Jun 01 2016

What is a Structured Settlement?

Pic structured

Over our 35 years of helping victims and their families get their lives back on track after a catastrophic accident, one of the tools we use quite often is a structured settlement.  These are used when the injuries and damages are so severe that the victim is entitled to payments over a long period of time, sometimes for the life of the client.

We recently implemented a structured settlement for our client, who was a truck driver and father of 7 young children all under the age of 12.  His accident was so severe that his injuries required several injuries and he lost an eye which required him to be fitted for a prosthetic eye.  He was unable to continue to work as a truck driver because of the loss of his eye.  He had limited skills and basically was determined to be permanently disabled.  The settlement William Rawlings & Associates was able to obtain for him was a six figure upfront cash payment and a monthly lump sum payment for the rest of his natural life.  This monthly payment was more than adequate to pay their mortgage, daily expenses and bills, future medical expenses for the client and their children.  The overall award was a multi-million dollar settlement.  Pursuant to the Gag Order in place we are unable to divulge to actual amount, suffice it to say, this family is well taken care of 30-40 years down the road.

We’ve have also seen firsthand how unscrupulous “advanced payment” companies prey on vulnerable people by convincing them to sell their structured settlements for pennies on the dollar. (You’ve seen them on TV…”It’s my money and I want it now!”  Well, thanks to the concerted efforts of many consumer advocates throughout the country, states are strengthening the laws dealing with the process of selling and transferring structured settlements. We have – and always will – continue to support these initiatives knowing that a structured settlement protects the best interests of personal injury plaintiffs and their families.

Benefits paid by a structured annuity are free from both investment expenses and income taxation. As of this writing, long-term structured annuities are producing internal rates of return above 4 percent. Structured annuities are issued by major life insurers. These companies have portfolios that consist mostly of bonds but also hold some equities. As a result, a structured annuity can produce a return higher than current bond market yields. This return goes directly to the accident victim or their loved ones, without significant shrinkage as a result of taxes and fees.