It can be overwhelming to accept settlement proceeds as the result of a personal injury, workers’ compensation, or wrongful death case. The money is often more than most people have handled at one time and in many cases, the claimant may not know what to do with it. It is important to work with a trusted settlement planner throughout the settlement process to ensure that the claimant understands all of their options up front. One such option available for these types of settlements is a structured settlement annuity—keep reading to learn about the advantages of a structured settlement.
Accepting a lump sum—why it’s not always the best option
Proceeds from personal injury, workers’ compensation, and wrongful death cases are usually income tax-free. However, if the proceeds are placed in a traditional investment vehicle (a mutual fund, for example), the earnings on the proceeds are taxable. Also, if the claimant is on needs-based government benefits (e.g., Medi-Cal, SSI, etc.), the acceptance of a lump sum will almost certainly exceed asset limit for those benefits, rendering the claimant ineligible for assistance. Lastly, claimants who receive large cash settlements often find themselves the target of “friends” and family asking for money, leading to the dissipation of the proceeds. A structured settlement provides a safe, reliable alternative to a lump sum. Here are the top five reasons to consider using one:
Contact Traci Kaas for more information
Our California-based settlement planning team frequently assists injured claimants in developing structured settlement plans that work for them. Contact us today at 800-354-2258 or firstname.lastname@example.org to learn more.
1 Guarantees are subject to the claims-paying abilities of the issuing insurance company.