What is a Structured Settlement?

​  A structured settlement is an agreement between a personal injury claimant and defendant to resolve injury claims and    provide compensation to the claimant or designee for a specified period of time, through one or more periodic payments.  Typically, the defendant, its liability insurer, or an assignee accepting that payment responsibility purchases an annuity from  an insurance company to fund that payment obligation. Periodic payments can be paid monthly, quarterly, annually,  periodically, in some combination, or along a unique agreed schedule, however the settling parties agree. How can my clients  benefit by purchasing structured settlement payments through Integrity Financial Group? Purchasing structured settlement  payments through IFG means your purchases payments (1) that are defined by date and amount, (2) that are paid through the  related annuity, and (3) that are paid pursuant to a court order – not a mere agreement – to your client or your client’s  designee as specifically set forth in that court order. By knowing the date and amount of the payments being purchased before  completing the purchase, you and your clients can structure a transaction providing an annualized fixed pre-tax rate of return  attractive to your client, between 4% and 7% (depending on applicable payment dates and amounts). Under Section 104(a)(2)  of the federal Internal Revenue Code, damages paid "on account of" a physical injury or wrongful death are excluded from an  individual’s income tax. But importantly for those who depend on this settlement, the investment income earned from a lump-  sum settlement can be fully taxable.

Under Section 104(a)(2) of the federal Internal Revenue Code, damages paid "on account of" a physical injury or wrongful death are excluded from an individual’s income tax. But importantly for those who depend on this settlement, the investment income earned from a lump-sum settlement can be fully taxable.

Under a structured settlement, all future payments are completely free from:

Federal & state income taxes,
Taxes on interest, dividends and capital gains, and
The Alternative Minimum Tax (AMT).

                        We are not giving tax advice you should confirm all taxing situations with a qualified tax person.

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