Tax Advantages To Structured Settlement Annuity
by Doug Smith

If you are pondering a structured settlement annuity, there are some points you need to know. A structured settlement is a deferred payment obligation resulting from the settlement of a personal injury claim.

In many cases structured settlements are paid out in precise amounts at regular time intervals (structured). Structured settlement annuities are one small cog in a giant industry.

People often think it illegal to sell a structured settlement or sell their incoming annuity payments. That is false, because people sell their structured settlement or annuity payments all the time.

Many don't understand that a structured settlement annuities provide very big income streams for insurance companies. The government can give large tax breaks to insurance companies that have a structured settlement annuity. This benefits insurance companies when the settlement is structured to provide ways for the insurance industry to take advantage of these tax advantages.



The strategy is to structure the payments of an injury award over a long period of time. The injured person receives long term support. Additionally, this arrangement help keep such people off of welfare. By keeping people off government subsidy, insurance companies provide a valuable public service.

That is why settlement awards can assist insurance companies in procuring such tax breaks. As a result, the insurance companies make money from the interest earned from a structured settlement annuity.

Structured settlement annuity payments paid to the injured person are not subject to taxes. These payments are not reported to the government as income on the income tax form.

This is why a structured settlement annuity can be a win-win situation. When money is needed for personal reasons, the person reasons, the structured settlement annuity can be sold.

Companies which a structured settlement annuity purchase make it possible for the previous owner of the annuity to receive large cash payments not available before because of the inflexibility of the insurance companies.

The flexibility to sell an annuity means a person can convert their structured settlement annuity payments to cash for any reason.



If you are contemplating a structured settlement annuity, or selling a structured settlement annuity, hire an experienced attorney. Hire the best one you can find.

Your lawyer will explain all the details related to a structured settlement annuity, as well as the steps required to sell a structured settlement annuity for a cash lump sum.

A simple internet or phone book search can help you find the financial and legal resources to help you make an informed about whether to sell your a structured settlement annuity.

This article is ©2006 by Doug Smith. Got a structured settlement and don't know whether to keep it or sell it? Want to know how to get the most money out of it? Browse our library of free articles and tips on structured settlements. Visit StructuredSettlements.LoansForAnyCredit.com. This article may be freely reprinted as long as this copyright notice remains intact, the article is unchanged, and all hyperlinks remain active and clickable.