by Structured Settlement Watchdog
RAM Funding Bleats the False Narrative That Structured Settlements Earn No Interest
"Q. Do I Get Interest on My Structured Settlement? A. No. The interest is a part of your structured settlement agreement and is therefore, tax-free. You do not then get interest on top of that" they say"
Structured Settlements 4Real
RAM Funding's marketing team strategically uses the word "no" at the beginning of a sentence to suggest that plaintiffs do not earn interest on structured settlements, which adds to the confusion. Plaintiffs often wonder, "Will I receive a return on my money?" While technically the money is not theirs until received, the answer is affirmative. The return is embedded within the benefits outlined in the settlement agreement and the annuity contract. These benefits are not arbitrary; they derive from an annuity quote obtained by the structured settlement broker(s) or settlement planner(s) who arranged the structured settlement.
In any structured settlement proposal, you should be able to determine the cost of the settlement and the sum of future payments (and/or the expected amount in the case of lifetime payments)
A key benefit of a structured settlement annuity is the certainty of knowing the amount and timing of payments. For instance, if the cost of the structure is $500,000 and the total future payments amount to $1.5 million, then there is effectively $1 million of "interest" incorporated. If you choose to invest the structured settlement payments as each structured settlement payment is received, you could potentially earn additional interest or capital gains on those investments.
Why Are Structured Settlement Payments Income Tax Free?
The tax-free status in a structured settlement is due to tax exclusion for workers compensation, or damages on account of personal physical injury or physical sickness as expressly set forth in Internal Revenue Code Sections 104(a)(1) or 104(a)(2).
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