Structured settlements offer accident victims and their families a tax-free stream of income to cover medical expenses, replace lost income or provide future financial security.
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Structured settlements give plaintiffs the flexibility to choose a payment schedule that meets their needs. They can start small and increase over time or decrease as their needs diminish.
Tax-Free Income
Structured settlements help injured parties obtain regular income by spreading payments over multiple years instead of receiving one large lump sum, which could easily be misspent. Structured settlements allow people to pay for their living expenses without relying on government support.
The Periodic Payment Settlement Act of 1982 encourages structured settlements for physical injury and wrongful death cases, while Congress extended their use for workers` compensation settlements as well. The Internal Revenue Code also contains tax benefits.
The Security of Your Own Home
Structured settlements offer many advantages, with long-term financial security being chief among them. This can be especially helpful for people living with medical conditions that will need long-term treatment or care needs.
Structured settlements differ from lump sum awards because they are guaranteed and fixed by the insurance company issuing them. This is in contrast to lump-sum awards, which fluctuate with market fluctuations. In addition, many states have insurance guaranty associations that protect these obligations in the event of an insurer`s bankruptcy.
A guarantee that payments will continue, no matter how the market changes, is a good way to protect against creditors and financial predators.
Flexibility
Structured settlements are a great way to pay for debts. You can choose from a variety of payment options, including monthly, quarterly, or annual payments.
Structured settlements provide another benefit by allowing you to customize payments according to your financial situation and future needs. It could be beneficial to increase payments in the future if you need more money for medical expenses or family needs.
Remember the risks associated with structured settlements. For example, selling the settlement for a lump-sum could cause you to lose certain tax benefits under the Periodic Payment Settlement Act.
Reliability
Structured settlements provide your clients with guaranteed funds for a specific date and amount. They also meet both their short-term and long-term healthcare needs.
The reliability of an experiment or measurement is the consistency in the results. For example, if you measure someone`s weight multiple times you should always get the same result.
When conducting research or creating tests, reliability should always be kept in mind. Make sure your questions and measurements don`t vary depending on the mood or concentration of participants.
Control
As opposed to receiving one lump sum payment, structured settlements give you more control of your money, enabling you to invest and withdraw large sums as necessary or use it towards purchases when needed.
Structured settlements also offer tax-free income for injured victims and their families, which is another major advantage. Thanks to the Periodic Payment Settlement Act of 1982, nearly all structured settlements from personal injury lawsuits are exempt from US federal income tax.
Structured settlements are periodic payments, also known as annuity payment, which can be in equal, increasing or decreasing installments.