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WHAT IS A STRUCTURED SETTLEMENT?
The structured settlement is a settlement option that provides an alternative to a lump sum cash
Structured settlement payments are guaranteed. They may be established as installments over a
specified length of time (i.e., monthly for 10 years), in future lump sums (i.e., annually for the next five
years), or a combination of installment payments and lump sums.
WHY OFFER A STRUCTURED SETTLEMENT?
A structured settlement provides a way for the defendant to reach the plaintiff and demonstrate an
alternative, longer-term financial benefit to the plaintiff.
Plaintiffs become educated about the benefits of a structured settlement only when presented with the
option. It's important to make the offer of a structured settlement even when opposing counsel doesn't
A structured settlement gives the defendant an opportunity to demonstrate to the plaintiff that he or she,
on a guaranteed basis, will be taken care of over time.
WHAT ARE THE BENEFITS OF A STRUCTURED SETTLEMENT?
A structured settlement is a negotiating tool and powerful financial option. It sweetens offers by
demonstrating to the plaintiff how guaranteed future payments can provide more cash over time than
what the defendant could afford to pay otherwise.
A structured settlement is irrevocable. Once established, it cannot be changed or altered by any party.
There is no risk to the defendant to enter into a structured settlement agreement since the liability is
assigned (the Uniform Qualified Assignment).
Settlement is an expense to the defendant. By entering into an assigned structured settlement the
defendant still receives a full deduction as an expense and can clear the liability from the company's
Structured settlements may be used in any type of case including Bad Faith, Personal Injury,
Discrimination, Work Comp, and Employment Litigation.
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WHAT IS THE PROCESS OF CREATING A STRUCTURED SETTLEMENT OFFER?
The attorney/adjuster/risk manager works with a structured settlement broker to create a financially
attractive alternative for the plaintiff.
The structured settlement broker researches available options for the defendant.
The broker recommends an annuity plan backed by one or more highly rated, reputable life insurance
companies to accompany the "cash" offer.
At the time of settlement, the defense attorney draws up the Settlement Agreement and Release and
the Uniform Qualified Assignment.
Once the documents are signed, the defendant is absolved of any responsibility for future payments to
the plaintiff. And, the structure company has assumed all liability and ownership of the settlement.
WHAT ARE THE COSTS AND FEES ASSOCIATED WITH THE STRUCTURED SETTLEMENT OPTION?
The defendant bears the initial cost of funding the annuity with money that would otherwise have been
paid in "cash" to the plaintiff. Once the annuity is established, the insurance company is responsible for
all future payments to the annuitant.
The broker's commission is built into the structured settlement and, therefore, is not an additional
expense to the defendant.