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Structured Claim Settlements
This article originally appeared in the August 2002 newsletter riskVue. Mr Underdown states that the best time to use structured settlements (annuity-based settlements) to settle insurance claims is when interest rates are high, and the next best time is when rates are low. The results of structured settlements qualified under section 104(a)(2) of the Internal Revenue Code and provide the benefit of tax-free income to claimants. In addition, the “anti-spendthrift” effect of structured settlements also provides a strong public policy argument for their use.