Clients have three payment options when their claim or lawsuit is settled:
1) a lump sum cash settlement,
2) periodic payments through a structured settlement annuity or
3) a combination of cash and structured payments. In section 130 of the tax code of 1986 as amended, the Internal Revenue Service allows defendants in injury cases to purchase insurance annuities or treasury bonds to fund structured settlements to the injured parties with all proceeds from the annuities tax-free.

Using annuities, injured parties receive guaranteed tax-free income issued by an A, A+ or A++ rated life insurance company. Injured individuals can decide to receive 100 percent of the funds through a structured settlement annuity or a combination of an annuity with a cash component for immediate or emergency situations.