What is a structured settlement

							                                         AXA Advisors, LLC
                                      Settlement Planning Group
WHAT IS A STRUCTURED SETTLEMENT?

A STRUCTURED SETTLEMENT is the payment of money for a personal injury claim where all or part
of the settlement is made in future payments. The periodic payments may be scheduled for any length of
time – even as long as your lifetime.

You may ask why you should take future payments instead of a cash payment. Either way, the settlement
amount of a personal injury claim can be income tax-free but if you take the entire settlement in cash, any
gain (interest) earned by investing that cash will be subject to federal and state income tax. If you use a
structured settlement, any gain earned from agreeing to receive higher total payments, but over a period of
years, will be federal and, for most states, income tax-free. This is why many plaintiffs direct a portion of
their settlement to a tax-free structured settlement annuity.

WHY IS A STRUCTURED SETTLEMENT GOOD FOR ME?

    1. Payments can be guaranteed.
       There is no need for you to worry about ups and downs in the financial markets. If the claim
       paying party is willing, periodic payments under a structured settlement generally can be made
       through an annuity contract issued and guaranteed by a life insurance company to be there to
       meet the injured claimant’s present and future needs and in a flow tailored to fit those needs.

    2. Payments can be income tax-free*.
       Structured settlement payments are free from federal and most state income tax. On the other
       hand, if one takes a lump sum of cash and invests it, the investment earnings may be taxable.

    3. A structured settlement may provide more dollars than a lump sum would.
       The party paying the claim may pay more benefits if the payments are made over a period of time
       rather than as a lump sum since delayed payments can take advantage of the internal build-up of
       the annuity. If instead, a settlement is taken in a lump sum which is then invested, one assumes
       the risks on the investment and conservation of funds for future needs, and would generally have
       to pay taxes on any investment earnings. In addition, benefits from structured settlements
       typically do not affect Social Security eligibility or payments.

    4. Control of the planning for your future money needs.
       By taking part in designing the structure, you can help design a settlement that will provide not
       only for present needs, but future needs as well. You can arrange payments that will replace
       income, provide for medical treatment, set up college funds, pay for rehabilitation, or plan for
       retirement. In addition, a structured settlement can be designed so that you will not outlive the
       money. This is especially important when industry studies have shown that recipients of lump
       sums of cash tend to spend them quickly.

Two drawbacks of structured settlement annuities that you should be aware of are: 1) the future
payment stream of a structured annuity can not be altered, 2) money invested in the annuity (principle) is
not readily available for the clients use (not liquid).

         * To be free from federal income tax, amounts must, among other requirements, be excluded from income under section
         104(a)(1) or (2) of the Internal Revenue Code.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this
document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that
may be imposed on the tax payer. The tax information was written to support the promotion or marketing of the transaction(s) or
matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

Securities products and services are offered through AXA Advisors, LLC (member SIPC), 1290 Avenue of the Americas, New
York, NY 10104. Structured settlement annuities and health insurance are underwritten by various unaffiliated carriers.

 GE – 34636 (01/06)                                                                                    AXA Advisors, LLC