Financial Planning Options For Your Personal Injury Settlement
Structured Personal Injury Settlements:
WHAT IS A STRUCTURED PERSONAL INJURY SETTLEMENT?
A structured settlement is a stream of future payments taken as an alternative to a single cash payment at the time of settlement. Funds to provide these future payments are paid to a life insurance annuity company which then issues an insurance policy for these payments. Because the management of money is no easy matter and recent studies have shown that many persons who receive large sums of money in settlement of a law suit have nothing left after several years, structured settlements have become very popular.
WHAT ARE THE BENEFITS TO A CLAIMANT?
- A tax-free income stream that can be guaranteed for the claimant’s life or the life of his spouse thus avoiding the risk that you will run out of income.
- Guaranteed future income which is not subject to market fluctuations.
- Protection from friends and relatives.
- Payment streams that can be individualized to meet the unique circumstances of each claimant.
WHAT ARE THE DISADVANTAGES TO A CLAIMANT?
- Loss of control over principal.
- The plan you chose cannot be changed later in life if your situation changes.
- Risk of insurance company insolvency.
- Rate of return is locked in at the inception of the settlement.
At DE CARO & KAPLEN, LLP, we recognize that the way funds are administered is as important as the settlement itself. Therefore we do not rely upon the defense insurance company or their lawyers to design a plan for our clients. We retain and work directly with our own structured settlement specialists to design a plan that will fit the future needs of our clients.