Advantages of Structuring

Financial security

A structure provides guaranteed tax-free income (pursuant to IRC section104(a)(1) and (2). Payments may be guaranteed for a specific time or as long as you live. The return on most other investments from a lump-sum settlement, conversely, is never guaranteed and risk can quickly become an undesired reality.

Tax-free with no administrative or management fees

Not only are all structured settlement payments tax-free, they have no administrative or management fees. Compare that to lump-sum cash settlements; they initially are tax-free, but invested proceeds often face management and administration fees, as well as potential tax liabilities. Even the most sophisticated investors often cannot match the after-tax returns of a structured settlement.

No burden of managing a large cash settlement

Successfully managing a lump-sum payout involves great risk and untold mental anguish. Some industry statistics note that proceeds from 90 percent of all single lump-sum cash settlements are depleted within five years, often succumbing to both market volatility or the plaintiffs’ investment inexperience. Structures require no investment savvy and eliminate all worry about market conditions. Your payout is guaranteed and tax free.

Virtually unlimited flexibility

Structured settlements epitomize flexibility. Designed to meet your specific needs, the tax-free payments can be scheduled for any length of time, even a lifetime. Payments can start immediately or in the future. They can be made monthly, quarterly, semi-annually or annually, even future lump sums in amounts and on dates you choose. If income needs are expected to grow, payments can grow. You can even include cost of living adjustments.

Protection for you and your family

A properly designed structured settlement can provide you with confidence and security – today, and for the future. Your structure can be designed to deliver a monthly disbursement for everyday needs – and can provide payments for future obligations, such as your children’s education or your own retirement – all on a tax-free basis.

Capital protection for minors

Structured settlement payments can protect your child by providing funds at the age of majority and spread the rest over a period of time that you determine. Court approval of the settlement is more easily obtained by presenting a well-designed structured settlement.

Estate protection for heirs

During the planning process, you determine the minimum number of guaranteed payments to be received. If you die before all payments have been made, your estate or heirs may receive all remaining payments tax-free. What’s more, this can allow beneficiaries to avoid probate.

Structures are backed by Highly-Rated Insurance Companies

The annuity contracts available through NFP Structured Settlements are offered by insurance companies rated A (Excellent) or higher by A.M. Best Company Inc.* These annuities are also subject to strict regulatory requirements, as well as federal reserving guidelines, providing you multiple layers of protection.


By law, structured settlements and the timing of any future payments can only be designed and created once. This must occur before the plaintiff accepts any settlement money. Thereafter, the structure and timing cannot be changed. Therefore, it is critical to design and create the most beneficial structure possible. Partner with NFP Structured Settlements before finalizing any settlement agreement.

NFP and its subsidiaries do not provide tax or legal advice. Please consult with your tax or legal advisor regarding your personal situation.

* An “A” (Excellent) rating is the third highest of the active-company ratings designated by A.M. Best Company. Inc. (“A.M. Best”) ratings for insurance companies range from “A++” to “S.” A.M. Best indicates that “A” (Excellent) ratings are assigned to those companies that in A.M. Best’s opinion have an excellent ability to meet their ongoing obligations to policyholders. A.M. Best’s ratings are not a warranty of an insurer’s current or future ability to meet obligations to policyholders, nor are they a recommendation of a specific policy contract, rate or claim practice. Learn more at A.M. Best.