Let’s take a look at what a structured settlement is and how they work. A structured settlement is a voluntary agreement between an injury victim and a defendant where the former is compensated through a stream of periodic payments primarily through the purchase of annuity via highly rated life insurance companies (Ringler works with several trusted companies, including Prudential, USAA, and MetLife, just to name a few). Structured settlements came about because leaders in the private, public, and non-profit sectors were noticing that more and more injured parties seemed to be handling cash payments from their cases poorly, resulting in lack of money overall. A study conducted by the American General Life Companies in 2007 showed that 57% of those involved in a personal injury case and chose a lump sum payment had nothing left; only 12% of people had 75% or more of their cash still available.
Structured settlements take payments from an injury case and put them in a tax-free annuity that allows the injured party to make smart decisions about their finances. It’s not surprising, then, that those that work in settlement cases are supportive of the stability and security structured settlements provide.
Structured settlements were first seen in Canada in a case between pregnant mothers and the drug Thalidomide. The drug was supposed to help with morning sickness, but it ended up causing miscarriages, stillborn births, and millions of dollars in victim settlements. Structured settlements were later brought to the United States in the 1970s and have been encouraged by the U.S. Congress since 1982 after the passage of the Periodic Payment Settlement Act. The idea of using periodic payments rather than one large lump-sum has become more attractive through the years, especially in cases of workers’ compensation and cases where minors are involved. Initially, structured settlements were to be used with large, catastrophic injury cases, but nowadays, a great number of structured settlement cases are much smaller. In the case of Ringler, half of these cases are less than $50,000. Currently, more annuities are being used in cases involving discrimination in the workplace, molestation, Medicare and Medicaid, environmental issues, and property loss.
The benefits of structured settlements include security and guaranteed long-term, tax-free income payments for the victims of physical injury and wrongful death lawsuits. Structured settlement payments can be made for as long as the injured person wants, even being paid out for their entire life. In the case of the injured person’s death, there’s a set amount of money that can be paid out to their estate or a named beneficiary, such as a significant other or child. In addition, structured settlements funded by annuities and their brokers are all regulated by the state insurance commissions.
While it’s tempting to want to get all your money at once, that kind of thinking only works in the present. With a structured settlement, the present and the future are taken into consideration. The settlement is also highly personalized to cater to your specific needs and goals. If you need a certain amount for medical bills right away, but also want to keep some funds for other things, then a structured settlement can offer you that. Structured settlements are also tax free and there are no management fees. If you have medical benefits from federal and private health care plans, then that’s protected as well. Structured settlements can be applied to a wide range of injury cases, no matter how much money is involved, so it’s in the injured party’s benefit to consider one.
Here at Ringler, we believe that structured settlements provide a win-win-win solution for everyone involved. For attorneys, we provide all the details and information needed so they can analyze the case and determine how a structured settlement will benefit their clients. For insurance professionals, we help them navigate the injured person’s expectations of getting a lump-sum offer versus the upsides of doing a structured settlement (greater payouts and tax advantages). For injured people and their families, we give them peace of mind by helping them move on from a traumatic event without worrying about managing a large sum of money. Ringler is the largest settlement planning company in the USA with over 250 professionals in more than 70 offices nationwide. We take an individualized, customer-focused approach to each case and collaborate with the injured party, attorneys, and insurance professionals. The first step we always take is to sit down with the injured party and just listen with respect. After that, we use several financial tools to match your investment goals and needs so your situation doesn’t remain a dark cloud hanging over your life. About one-third of all structured settlements in the United States involve a Ringler consultant, so you can rest assure that you’ll be in capable hands.
If you’re looking to find a consultant, click here. Need more reasons to choose Ringler? Check out what others have said about our structured settlement consultants.
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