Wed. Jun 7th, 2023

structured settlement worth

Factors That Affect Your Structured Settlement Worth

The structured settlement process provides you with a stream of tax-free payments designed to meet your needs over time. It gives you peace of mind and security for the long haul.

However, not everyone knows how to make the best use of their structured settlement payments. Some people will take their money and spend it on questionable investments or luxuries.

Guaranteed Payments

A structured settlement is a negotiated settlement of a personal injury claim in which the defendant agrees to make periodic payments to the plaintiff. It can ease the financial burden that many victims of physical injury face while they wait for their case to resolve.

It can also protect a claimant’s funds from market fluctuations and provide guaranteed income that does not run out before death. While it is not for everyone, it can be a good option for people who have significant medical or dental bills and who are worried about outliving their money.

Some structured settlements allow a claimant to transfer their remaining payments to a beneficiary upon the death of the annuitant. These transfers are usually tax-free and can be an excellent way to leave a legacy for your family.

Alternatively, some structured settlements contain a ‘Commutation Rider’ that allows the claimant to choose to receive a discounted lump sum payment instead of all the remaining payments from the settlement. This can be beneficial if the annuitant has a young family and does not want to have to worry about their money in the event of their untimely death.

Ultimately, the benefits of structured settlements are well worth considering for individuals who have been injured and need a reliable financial plan to take care of their needs. The experienced attorneys at ROBINYOUNG & COMPANY understand this process and will help you reach the best possible outcome for your situation.


The rate of inflation is a key factor in the value of your structured settlement. It is the average annual change in prices over time of a particular product or service.

Economists use a variety of methods to determine the inflation rate. Some are based on weighted average prices, while others are based on indexes that calculate inflation by choosing a base year and comparing subsequent years.

When inflation is high, it can lead to a redistribution of purchasing power between different sectors of the economy. This can negatively affect those on fixed nominal incomes, but may also benefit those with variable earnings.

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It can also have a negative effect on international trade by increasing the cost of goods and services. Moreover, it can also create instability in currency exchange rates.

Inflation is usually a result of increased production costs, but it can also be caused by excess printing of the dollar or an increase in demand for a particular good or service. Regardless of the cause, inflation can be harmful to the economy as a whole.

As a result of these effects, people may become more concerned about the cost of living and begin to hoard money instead of investing it. In some cases, inflation can lead to negative effects on the economy such as lower savings rates and reduced employment levels.


The IRS considers structured settlement payments to be income, and they are subject to tax. However, in many cases, the taxes on structured settlements are very low.

One benefit of using a structured settlement is that it provides a safe way for accident victims to receive income without having to worry about being caught by the IRS. This is because the funds are placed into an annuity contract, which is an irrevocable stream of payments from an insurance company.

This ensures that future income is provided, even if the economy is bad or insurance companies experience financial problems. This is especially beneficial if the recipient has long-term medical needs or other significant costs.

Another important benefit of a structured settlement is that the annuity is tax-free. This is because Section 104 (a) of the Internal Revenue Code states that damages from on-the-job physical injuries or illnesses are not considered income and therefore, cannot be taxable.

Structured settlement annuities can be sold in a number of ways. A plaintiff can sell a portion of the future payments, sell the entire annuity or simply liquidate the settlement and get a lump sum. In any case, it is important to create a financial plan that will allow you to sell only the amount of payments you need.


Investments are the way people put their money to work today with hopes of obtaining a larger amount of cash in the future. Ranging from stocks, bonds, real estate and commodities to modern alternative investments, investors seek to grow their funds through investments that are both safe and relatively easy to manage.

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However, investments have the potential to lose money as well, so it’s important to understand what you’re getting into and whether or not you can handle volatility. Fortunately, structured settlements offer a stream of guaranteed payments that are unlikely to fluctuate with market changes and therefore offer an excellent source of diversification within your self-directed IRA.

In fact, structured settlements often pay higher rates of return than some other fixed income products, which can make them attractive options for certain investors. But, they also offer a degree of illiquidity, as there isn’t an active secondary market for these investments.

This can be problematic if you’re trying to decide whether or not to sell your structured settlement. You’ll have to consider several things, including how much cash you need in the short term and what future financial obligations you may have. In addition, you’ll have to take into account the tax consequences of selling your annuity.

Unexpected Burden

An unexpected burden can have a dramatic effect on the structured settlement worth of an injured victim. It can be a financial hardship for a person who has to deal with large medical bills and other expenses that are not covered by their periodic payments.

A lump sum can help a victim pay off these debts and make the situation less stressful. The lump sum can also be used to cover expenses related to treatment or medication.

Many accident victims may not have the experience needed to manage their funds and plan ahead. They may find it difficult to avoid overspending or pressure from friends and family.

These factors can impact the future value of a structured settlement, but they can be avoided by using proper planning and an experienced lawyer.

Structured settlements are a safe way for injury victims to save money and protect their financial futures. They are a good alternative to traditional investments, and they offer tax benefits.

In addition to saving taxes, structured settlements also offer guaranteed returns and are one of the most stable investments available. The return on a structured settlement is set when it is purchased, so it is not subject to fluctuations in the market. Its return can outpace savings accounts, current yields on bonds, and other investment vehicles.

Will Friends and Family Look for a Handout?

One of the first things you do when you start planning a structured settlement is putting together a list of potential beneficiaries. These are the individuals that will be a part of your kink free financial future for as long as you live. Fortunately, the good news is that you will have a lot of support in the form of family and friends, as well as colleagues and clients who are willing to be your cheerleaders when it comes to navigating the choppy waters of the ensuing financial upheaval. Of course, you will need to put in some serious effort if you are going to be able to make these important transitions.

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Lack of Experience

If you’ve never been involved in a lawsuit or had any experience managing money, you might be hesitant to receive a structured settlement. Many plaintiffs spend their settlement money in less than five years, and this is mainly due to poor money management habits.

Structured settlements can be an excellent way to manage a large sum of money without the risk of losing it altogether. They provide periodic payments, which can be integrated into a diversified investment portfolio. Moreover, they can offer rates of return that are competitive with other investments. Additionally, they can provide tax-free income if you qualify for the benefits.

While you don’t have to be an expert in money management, a good attorney will help you understand what you can and cannot do with your settlement money. This will ensure that you don’t waste it on things that don’t matter or that aren’t in your best interests. In addition, a good lawyer will look beyond your medical bill totals to help you understand your case’s true value. This is the only way to get a fair settlement that will give you the financial security you deserve. Ultimately, a structured settlement is the best option for most people who have been injured in a personal injury accident.

Jeffrey Augers
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By Jeffrey Augers

Jeffrey Augers is a highly skilled and experienced financial analyst with over 12 years of experience in the finance industry. He has a proven track record of delivering exceptional financial insights and recommendations to clients, empowering them to make informed decisions and achieve their financial goals. Jeffrey holds a Bachelor's degree in Finance from the University of Michigan, and an MBA from the Wharton School of Business.