Allstate is a recognized leader in the Structured Settlements industry, with over $8 billion in Structured Settlement annuities issued to date.
We have been able to provide innovative product offerings for more than 25 years, and we continue to look for ways to assist brokers in the sales process.
What is a structured settlement?
Structured Settlements are used to effectively resolve physical injury claims by combining immediate cash and periodic payments in a way that helps to meet the injured party’s financial needs.
Under a structured settlement, the injured party doesn't receive compensation for his or her injuries in one lump sum. Rather, he or she receives a stream of payments, tax-free, and tailored to meet future medical expenses and basic living needs.
A structured settlement may be agreed to privately (for example, in a pre-trial settlement) or it may be required by a court order, which often happens in judgments involving minors.
The benefits of a structured settlement over a lump-sum payment:
Structured settlements have several advantages:
They provide financial security. A qualified structured settlement can provide needed funds to the injured party over a period of time.They relieve the injured party from the pressure of figuring out how to invest and manage a lump sum payment over a long period of time.Structured settlements are exempt from federal and state income taxes.
Why should I consider a structured settlement?
The tax-free payments from a structured settlement can help:
Relieve the financial pressures of medical expenses and living needs; Meet long-term rehabilitation or permanent care facility expenses; Provide for the future costs of college funding, retirement, down payment on a home, or mortgage payment; and Provide long-term financial security.
Who determines the amount of payments and the payment schedule?
A relatively simple payment schedule can be set up that provides for equal payments at set intervals - for example, every month for 20 years.
Yet, payments need not be in equal amounts. Someone who will need a new wheelchair every three years might elect to receive a larger payment every 36 months to help defray the cost.
In any physical injury case, the parties negotiate the compensation amount for such things as the injured party’s medical care and basic living and family needs. Often, one side (or both) will bring in a structured settlement broker who provides calculations on the long-term cost of these needs.
When there is agreement on the benefits owed to the injured parties (which can happen before, during or after a lawsuit or claim resolution), the defendant will agree to fund a stream of payments that meets these needs. The defendant then assigns this obligation to Allstate Assignment Company, an affiliate of Allstate Life Insurance Company. Then, the assignment company funds the settlement payments with an annuity contract from a life insurance company. The life insurance company typically makes the payments to the injured party.
Structured settlements can be suitable for many types of cases, including:
Persons with temporary or permanent disabilities;Guardianship cases that may involve minors or persons found to be incompetent;Workers compensation cases;Wrongful death cases where the surviving spouse and/or children need monthly or annual income; and,Severe injury, especially with long-term needs for medical care, living expenses and support of family.
What are some of the tax laws that govern structured settlements?
Section 104(a)(2) of the Internal Revenue Code clarifies that the full amount of the structured settlement payments is tax-free to the injured party. (By contrast, the future investment earnings on a lump sum payment are usually fully taxable.)Congress specified through IRC Section 130 the requirements to establish a qualified assignment, as described above.
Allstate also has flexible solutions for many other types of needs:
Non-physical Injuries
Employment Litigation (except for wages)
Punitive Damages
Property Damages
Attorney Fees
Long-term Disability
Structured Sales (IRC Section 453)
Celebrity Endorsement Fees
Broker (Realtor) Fees
Contact Sales Support at 1-877-402-6811 for additional information regarding these types of taxable or tax-deferred solutions.
Experience:
We have experience and expertise unmatched in the industry and look forward to working with you. Our customers have our reassurance that their needs remain our number one focus. Allstate's experienced staff and superior customer service team is dedicated to providing the uncompromising level of service expected from Allstate.
Allstate Life Insurance Company ratings*:
A+ (Superior) Allstate Life Insurance Company
A+ (Superior) Allstate Life Insurance Company of New York (g)
Ratings are from A++ (superior) to D (poor). Allstate Life Insurance Company of New York's (g) indicates its group affiliation with Allstate Life Insurance Company.- A.M. Best
A1 (Good)
Ratings range from Aaa (exceptional) to C (lowest). - Moody's
A+ (Strong)
Ratings range from AAA (extremely strong) to D (in general default). - Standard & Poor's
* Our ratings (as of 1/11). Ratings are subject to change without notice.
Useful Links:
Allstate International Assignment, Ltd. **
** Allstate International Assignments, LTD, is not an affiliate of Allstate Life Insurance Company.
Allstate Life Insurance Company is a member of the National Structured Settlements Trade Association.