What is a Structured Settlement? Kelly Ramsdale: New Mexico, Oklahoma'
If you're injured in a car accident and receive a $300,000 settlement from the other driver or insurer, it's tax free. When you invest the $300,000, your investment earnings are taxable. If you receive a structured settlement instead of the $300,000 cash, you'll get payments over a term of years or your lifetime (however you choose), and each payment is fully tax free. Thus, a structure converts your after-tax earnings into a tax free return.
Structured settlement brokers (a special type of insurance agent) consult as a case approaches settlement. For more about brokers, see National Structured Settlements Trade Association...http://www.nssta.com.
Brokers are paid standardized commissions by the life insurance company that issues the annuity. Brokers can run many financial projections based on a term of years, payments over your life, over your joint life with your spouse, etc. You can even call for no payments for say 10 or 15 years, with payments starting thereafter as a way to fund your retirement.
Thus, structured settlements are very flexible. Provided that you consider these issues before signing a settlement agreement in your case, you can structure as much or as little as you want and take the rest in cash. With all of this, though, they have to be set up properly.
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Labels: Structured Settlement, structured settlement Definitions, Structured Settlement Videos
Source: http://visa-insurance.blogspot.com/2012/11/structured-settlement-what-is.html
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Thanks so much for this information! I have been doing research for my finance class on structured settlement payments. This article really was a time saver! Thanks so much for the help and for posting it!
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